Rain Commoditiess Ar 2012

RAIN COMMODITIES LIMITED
BOARD OF DIRECTORS
Mr. N. Radhakrishna Reddy Mr. N. Jagan Mohan Reddy Mr. N. Sujith Kumar Reddy Mr. Dipankar Basu Mr. S L Rao Mr. H L Zutshi Mr. E.S. Ravisekar Mr. Yogesh Rastogi Mr. G. Krishna Prasad Chairman Managing Director Director Independent Director Independent Director Independent Director Nominee Director, IDBI Bank Limited Nominee Director, ICICI Bank Limited Independent Director
CHIEF FINANCIAL OFFICER Mr. T. Srinivasa Rao
COMPANY SECRETARY Mr. S. Venkat Ramana Reddy
STATUTORY AUDITORS M/s. Deloitte Haskins & Sells, Chartered Accountants, 1-8-384 & 385, 3rd Floor, Gowra Grand, S.P. Road, Secunderabad - 500 003, A.P.
INTERNAL AUDITORS M/s. Ernst & Young Pvt. Ltd, The Oval Office, 18, iLabs Center, Madhapur, Hyderabad - 500 081, A.P. BANKS IDBI Bank Limited Citibank ICICI Bank Limited Indian Bank REGISTERED OFFICE "Rain Center", 34, Srinagar Colony, Hyderabad-500 073, Andhra Pradesh, India. Phone No. 040-40401234 Fax No. 040-40401214 Email: secretarial@priyacement.com
38th Annual Report 2012
Sl. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.
Contents
Profile of the Rain Group Key Financial Indicators on a consolidated basis Notice Directors Report Management Discussion and Analysis Report on Corporate Governance Auditors Report Standalone Financial Statements Operational Performance of Subsidiary Companies Auditors Report on Consolidated Financial Statements Consolidated Financial Statements ECS Form Proxy Form Attendance Slip Request for dematerialization of Physical equity shares
Page No. 04 10 14 18 28 33 52 55 82 84 85 113 115 117 119

Rain Commodities Limited ("Rain Group") is the leading producer of Carbon Products (Calcined Petroleum Coke and Coal Tar Pitch) in the World and is one of the leading producers of Cement in South India. Business Vertical Description of Business Calcined Petroleum Coke:
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Calcination of Green Petroleum Coke (a by-product of Petroleum Refinery) to produce Calcined Petroleum Coke ("CPC") Activities across USA and Asia Co-generation of Energy (Steam and Electricity) through Waste-heat recovery generated in the calcination of Green Petroleum Coke. Distillation of Coal Tar (a by-product in manufacturing of Steel) to produce "Coal Tar Pitch". Activities across Europe and North America. Conversion of chemicals, produced in the distillation of Coal Tar to produce value-added "Carbon Chemicals" Trading of Fuel Grade Petroleum Coke, with activities in India, USA, Europe and Middle East . Production and Sale of Cement Activities spread across South India Marketed under the brand name "Priya Cement"
Co-generation of Energy through Waste-heat Recovery:

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Carbon Products Business
Coal Tar Pitch@:

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Carbon Chemicals@:
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Trading in Petroleum Coke:

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Cement Business
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@ Rain Group has diversified its end markets with entry into Coal Tar distillation business through the acquisition of Belgium based Ruetgers Group ("Ruetgers") on January 4, 2013. Ruetgers is Europe's leading and world's second largest Coal Tar distiller and is a leading producer of Coal Tar Pitch ("CTP" or "Pitch") along with other co-products including Naphthalene Oil, Aromatic Oils and other Carbon Chemicals.With eight operating facilities spread across North America and Europe, Ruetgers currently has more than a million tons of Coal Tar distillation capacity. The ninth facility, a Joint Venture in Russia with about 300,000 tons of coal tar distillation capacity is under construction.

Acquisition Rationale We envisage the Acquisition to significantly expand our operations and diversify both our geographic footprint and product portfolio without diverging from our core business. Expanding into the Coal Tar distillation business is complementary to our Calcining operations, as Rain Group and Ruetgers share the same underlying business model of converting a by-product into a value added product for the Aluminum industry. The likely key benefits of the Acquisition include the following: We believe our increased scale of operations and strengthened cash flows will create an improved platform from which to capitalize on growth opportunities in the global market. These opportunities include leveraging our complementary customer bases to cross-sell our CPC and CTP products. We expect our broader and more diversified geographic footprint and product portfolio to help the combined company deliver more stable financial performance. We expect to leverage the technological capabilities of both Rain Group's and Ruetgers' research and development organizations.This includes facilitating lower cost CPC and CTP combinations for the customers.We expect the combined company to have greater flexibility to commercialize Rain Group's patented ICE technology to utilize lower cost coke inputs in CPC blends, while maintaining competitive performance characteristics for our customers.We also expect the combined company to use Ruetgers developed CARBORES technology to maximize anode quality advancement. Ruetgers' CARBORES technology is an environment friendly Pitch binder which produces less emission than traditional Pitch binders and that has the potential to be used in the Aluminum industry as it exhibits the capability to increase Aluminum output and improve utilization rates of Aluminum smelters. Competitive Strengths of the Combined Entity Global leader in essential Carbon products for the Aluminum industry We intend the combined company to become a leading carbon supplier to the Aluminum industry with significant operating scale. Rain Group is a leading producer of CPC with Global market share of about 8% and Ruetgers is currently the second largest Coal Tar distiller with Global market share of about 8%. Additional Coal Tar distillation capacity is expected to become available during 2014 through the Russian JV. We expect the combined company to be able to manage the entire Carbon Anode supply chain, providing Aluminum customers the access to meet all their Carbon needs, including enhanced inventory management, via a single supplier. As a result of the expected global scale of the combined company, long-standing supplier and customer relationships, production resources, application know-how and expertise in complying with industry regulatory requirements, we believe we will be well positioned to maintain our industry-leading position. Longstanding relationships with global customers Rain Group and Ruetgers have a complementary Global Aluminum customer base which includes companies such as Alcoa, Rio Tinto Alcan, Norsk Hydro ASA, Century Aluminum and Aluminerie Alouette Inc., BHP Billiton, National Aluminium Company Limited, Vedanta Aluminum Limited, etc. Further, both Rain Group and Ruetgers have maintained relationships with many of their customers for over 15 years on average. We intend to work closely with our customers to improve existing products and develop new products and processes to reduce costs for both the combined company and our customers.

Favorable industry fundamentals supported by Aluminum production growth Approximately 77% of all CPC produced across the World and approximately 80% of all CTP produced across the World is sold to primary Aluminum producers. As such, primary Aluminum production is the most important determinant of CPC and CTP demand. While both CPC and CTP are critical inputs for Aluminum production, as no known economically viable substitutes exist, they remain a small portion of an Aluminum smelter's costs. World production of primary Aluminum totaled approximately 47.1 million metric tons in 2012 and is expected to grow to approximately 59.6 million metric tons by 2016, representing a compounded annual growth rate ('CAGR') of 6.1%. The growth in the demand for Aluminum is expected to be driven by increasing use of light-weight materials in many key industries such as transportation, construction, packaging and consumer electronics. Annual demand for CPC is expected to grow from approximately 25.9 million metric tons in 2012 to approximately 34.5 million metric tons in 2016, representing a (CAGR) of 7.4%. Similarly Annual CTP demand is expected to grow from approximately 6.3 million tons in 2012 to approximately 7.8 million tons in 2016, representing a CAGR of 5.5%. We believe the combined company is well positioned to capitalize on strong industry fundamentals given its leading position in the market. Long-term contracted raw material supply-a key barrier to entry In both CPC and CTP industries, secure access to raw materials is a key competitive advantage. Given the expectation for a continued tightening in the worldwide supply of traditional Anode Grade GPC and Coal Tar, we believe it would be difficult for a new entrant to get secure supply of these critical raw materials. Both Rain Group and Ruetgers enjoy long-standing relationships with many of their respective suppliers. We believe that the close proximity of our calcining facilities to suppliers minimizes freight costs and provides a significant competitive advantage. In addition,we believe that we have maintained strong relationships with our refining partners regardless of contract duration, resulting in repeated contract renewals over many years. More than 90% of Ruetgers' Coal Tar supply is based on long-standing framework contracts and its relationships with most of its suppliers exceed 10 years. Ruetgers recently expanded its Coal Tar supply base by establishing the Russian JV. The secure access to high quality GPC and Coal Tar through long-term relationships provides us with a relatively stable source of raw materials to serve our customers reliably. Diversified geographic profile with advantaged freight and transport logistics The combined company will have an extensive global footprint, with 17 production facilities located in Belgium, Canada, China, Germany, India, the Netherlands, Poland, Russia (from 2014 through the Joint Venture with Severstal) and the United States, inorder to serve our customers, we maintain extensive logistics and transportation networks. Rain Group's facilities operate in locations that provide favorable and efficient sourcing of GPC, with two facilities located adjacent to crude oil refineries. Our facilities are designed to further reduce transportation and logistics costs. Rain Group has dedicated vessel loading stations at three different facilities in Louisiana, USA. Ruetgers operates a fleet of specialty rail cars and a fully-leased fleet of specialty vessels for deep sea and inland water transportation, which increases its ability to source coal tar and supply its products globally. Increased product and market diversification We expect the combined company to be more diversified across end markets. While the Aluminum industry will remain the primary end market for the combined company, with CPC and CTP sales together representing major portion of the revenues, our product offering will be diversified into other products such as energy, resins and modifiers, aromatic chemicals and superplasticizers. CPC and CTP prices are dependent on the demand dynamics of the Aluminum

industry, while prices of resins and modifiers, super-plasticizers and other chemicals are driven primarily by broader macro-economic conditions. We expect these additional products will help mitigate our exposure to the Aluminum industry. Industry leader in proprietary product development and R&D capabilities We believe Rain Group's CPC business has led the industry in development efforts to utilize a wider range of GPC raw materials for use in Aluminum anodes. Alternative raw materials such as shot coke and other non-traditional anode cokes ("NTAC") are not only typically priced at a discount to traditional anode grade coke, but such NTACs are produced by more refineries resulting in adequate supply of NTAC for use by Aluminium smelters. Accordingly, we anticipate increasing commercial use of NTACs, as traditional anode grade GPC availability declines. Rain Group developed the patented ICE technology, jointly along with an Aluminum smelter, which allows us exclusive use of shot coke in anode blends. Shot coke is a very specific and distinctive type of NTAC. Rain Group is currently working with a major Aluminum smelting customer to carry-out a two year extended trial with this technology. Through selective investment, Ruetgers has developed flexible production facilities and processes that allow it to produce high quality CTP and down stream products. In addition to the flexibility of its facilities and production processes, Ruetgers' research and development team focuses on creating innovative products to meet its customers' evolving needs and to keep pace with industry standards and preferences. In particular, Ruetgers' CARBORES technology is an environmental friendly pitch binder, which produces lesser emissions upon use compared to certain alternative pitch binders and has the potential to be used in the Aluminum industry to improve anode performance and reduce anode production costs. We believe the combined company will be positioned to develop new, lower cost and more efficient combinations of coke and pitch for customers and create customized solutions. Experienced and proven management team The combined company will be led by an experienced management team with over 100 years of combined experience in the industry, and with average industry experience of senior management of over 15 years each. While Rain Group's management will oversee the combined company, Ruetgers' senior management team (which has an average of over 20 years of relevant experience) will remain in place to allow for a smooth integration of the two businesses.
RAIN COMMODITIES LIMITED Rain Group Operating Facilities

Facility Visakhapatnam Andhra Pradesh, India Product CPC Description Two rotary kilns Located in the Visakhapatnam Port Area Proximity to new Aluminum Smelter plants Integrated with Co-generation facility Two rotary kilns Dedicated barge dock facility Two rotary kilns Dedicated deep-water terminal Integrated with Co-generation facility (commissioned in CY 2012) Two rotary kilns Located adjacent to Marathon oil refinery One rotary kiln Dedicated deep-water terminal Integrated with Co-generation facility One rotary kiln Dedicated deep-water terminal Integrated with Co-generation facility One rotary kiln Located adjacent to Motiva oil refinery Integrated with Co-generation facility One rotary kiln Focused on specialty applications Direct rail or truck shipments to customers One vertical shaft furnace Entire GPC requirement is sourced locally Engaged in production of Slag Foaming Carbon Materials and Recarbonizers One rotary kiln Pit Head Lime Stone Mines Markets the product under the brand Priya Cement Two rotary kilns Pit Head Lime Stone Mines Markets the product under the brand Priya Cement
Moundsville West Virginia, USA Lake Charles Louisiana, USA
CPC CPC
Robinson Illinois, USA Chalmette Louisiana, USA
CPC CPC
Gramercy Louisiana, USA
CPC
Norco Louisiana, USA
CPC
Purvis Mississippi, USA
CPC
Zhenjiang, China Adabeya - Suez, Egypt Nalgonda Andhra Pradesh, India
CPC Coke Trading Cement
Kurnool Andhra Pradesh, India
Cement
RAIN COMMODITIES LIMITED Ruetgers Operating Facilities

Facility Castrop Rauxel, Germany Product Description Coal tar distillation (largest plant globally) with integrated downstream production operations Dedicated river port and access via sea, rail and road Coal tar distillation with integrated downstream production operations Transport access via sea and road Serves as hub for North America and is the only coal tar distillation facility in Canada Transport access via sea, rail and road Joint venture with Severstal in Russia Focused on pitch supply to the North Atlantic, Russia and the Middle East Transport access via sea, rail and road Downstream resins production Dedicated river port Downstream resins production New heat polymerization technology for tailor-made products Downstream Superplasticizer production Downstream regional producer of impregnated wood products Soft pitch production Serves as hub for Eastern Europe Coal Tar Distillation Zelzate, Belgium Coal Tar Distillation Hamilton, Canada Coal Tar Distillation Cherepovets, Russia (under construction, expected to be operational in 2014) Duisburg, Germany Uithoorn, The Netherlands Coal Tar Distillation Resins and Modifiers Resins and Modifiers Superplasticizers CTP Representation Office
Candiac, Canada Hanau, Germany Kedzierzyn Kozle, Poland Shanghai, China
Ruetgers facilities are strategically located and have direct or indirect access to overseas distribution channels and to major logistic networks. Ruetgers utilizes fully-leased specialty transportation assets including: One icebreaker (deep sea) with 8,000 MT of capacity and secure year-round access to St. Lawrence, Canada and the Baltic Sea; Two barges with 2,000 MT of capacity each for in-land transportation; and Approximately 350 rail cars, with Ruetgers' own terminals and connection of European sites with regional sourcing pools.
KEY FINANCIAL INDICATORS ON A CONSOLIDATED BASIS
Revenue (INR Millions)
56,395 44,615 36,494 37,857
53,615
CY 2008
CY 2009
CY 2010
CY 2011
CY 2012
Operating Profit (INR Millions)
12,194 9,120 7,680
14,093 11,667
CY 2008
CY 2009
CY 2010
CY 2011
CY 2012
Notes: (1) (2) Revenue numbers for the previous years have been reclassified to correspond with the current year's classification / disclosure. Operating Profit is Profit before Exchange (Gain) / Loss, Depreciation, Interest, Taxation and Exceptional Items.
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Adjusted Profit After Tax (INR Millions)
6,641 5,796 4,038 4,020
3,305
CY 2008
CY 2009
CY 2010
CY 2011
CY 2012
Adjusted Basic Earnings Per Share (EPS) (INR)
18.76 16.77
11.47
11.35 9.33
CY 2008
Note: (1) (2) (3) (4)
CY 2009
CY 2010
CY 2011
CY 2012
EPS of the previous periods have been recomputed to give effect to the share split (in the ratio of 1:5) in CY 2011. Profit After Tax and Basic EPS of CY 2009 adjusted for exceptional profit of Rs. 513 Million (net of tax Rs. 418 Million) on sale of Investment in Petroleum Coke Industries Company, Kuwait. Profit After Tax and Basic EPS of CY 2010 adjusted for net exceptional expenditure of Rs. 1,249 million (net of tax Rs. 898 Million). Profit After Tax and Basic EPS of CY 2012 adjusted for one time expenditure of Rs. 1,789 million (net of tax Rs. 1,218 Million) incurred in-connection with the acquisition of Ruetgers.
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Net Worth (INR Millions)
25,517 21,209
13,933 12,104 8,398
Dec 2008
Dec 2009
Dec 2010
Dec 2011
Dec 2012
Book Value Per Share (INR)
74.68
60.69 34.18 23.71 39.34
Dec 2008
Dec 2009
Dec 2010
Dec 2011
Dec 2012
1,963
Total Assets (US$ Millions)
1,279 1,166 1,109 1,038
Dec 2008
Dec 2009
Dec 2010
Dec 2011
Dec 2012
Notes: (1) Book Value Per share of the previous periods has been recomputed to give effect to the share split (in the ratio of 1:5) in the current financial year. (2) The Total Assets as of December 31, 2012 includes US$ 677 Million of proceeds from issue of Senior Secured Notes.These proceeds are consigned to an Escrow Bank account and subsequently utilised for completion of Ruetgers acquisition. (3) As majority of the assets are in Dollar terms, we have converted the reported Indian Rupees into US Dollars applying the RBI's reference rate at the end of the respective financial years.
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Gross Debt in USD (US$ Millions)
1,265
777 705 647 703
Dec 2008
Dec 2009
Dec 2010
Dec 2011
Dec 2012
728
Net Debt in USD (US$ Millions)
610 575 536 413
Dec 2008
Dec 2009
Dec 2010
Dec 2011
Dec 2012
4.20 X
Net Debt to Net Worth
2.22 X
1.96 X 1.35 X 0.89 X
Dec 2008
Dec 2009
Dec 2010
Dec 2011
Dec 2012
Notes: (1) As majority of the debt is in Dollar terms, we have converted the reported Indian Rupees into US Dollars applying the RBI's reference rate at the end of the respective financial years. (2) The Gross Debt as of December 31, 2012 includes US$ 677 Million of Senior Secured Notes issued in relation to the acquisition of Ruetgers. The proceeds of which were consigned to an Escrow Bank account and subsequently utilised for completion of Ruetgers acquisition. As the bond issue proceeds are credited on December 31, 2012 and acquisition was completed on January 4, 2013, the net debt as of December 31, 2012 was significantly lower compared to gross debt.
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NOTICE
Notice is hereby given that the 38th Annual General Meeting of the Members of Rain Commodities Limited will be held on Saturday, the April 27, 2013 at 11:00 A M at KLN Prasad Auditorium, Federation of Andhra Pradesh Chambers of Commerce & Industry (FAPCCI), Red Hills, Hyderabad-500 004, Andhra Pradesh to transact the following business: ORDINARY BUSINESS: 1. To receive, consider and adopt the Balance Sheet as at December 31, 2012, Statement of Profit and Loss for the Financial Year ended on December 31, 2012 and reports of Directors and Auditors thereon. To declare a dividend on equity shares for the Financial Year ended on December 31, 2012. To appoint a Director in place of Mr. N. Radhakrishna Reddy, who retires by rotation and being eligible offers himself for re-appointment. To appoint a Director in place of Mr. S.L. Rao, who retires by rotation and being eligible offers himself for re-appointment. To appoint M/s. B S R & Associates, Chartered Accountants (ICAI Regn. No.116231W), as the Statutory Auditors of the Company to hold office from the conclusion of this 38th Annual General Meeting until the conclusion of the 39th Annual General Meeting of the Company in place of M/s. Deloitte Haskins & Sells, Chartered Accountants, retiring Auditors, who have not offered themselves for re-appointment as Auditors of the Company and to authorise the Board of Directors to fix the remuneration of Auditors. SPECIAL BUSINESS: 6. To consider and if thought fit to pass with or without modification, the following resolution as a Special Resolution: "RESOLVED THAT pursuant to the provisions of Section 314 and all other applicable provisions of the Companies Act, 1956 (including any statutory modification(s) or re-enactment thereof, for the time being in force), the consent of the members of the Company be and is hereby accorded for the appointment of Mr. Jagan Mohan Reddy Nellore (Managing Director of the Company) as Chief Executive Officer of CPC Holdings USA, LLC., (CPCUSA), a step down wholly owned subsidiary company for a period of 5 years, w.e.f. April 27, 2013 at a Remuneration not exceeding 5% of the consolidated net profit of CPC Holdings USA, LLC and on such terms & conditions as may be decided by the Board of Directors of CPCUSA. FURTHER RESOLVED THAT the Board be and is hereby authorized to do all such acts, deeds, matters and things and give such directions as may be necessary, in the best interest of the Company, for giving effect to the aforesaid resolution, including but not limited to signing and execution of necessary forms, papers, writings, agreements and documents including giving customary representations and warranties together with such indemnities as may be deemed necessary and expedient in its discretion." By order of the Board for RAIN COMMODITIES LIMITED Place: Hyderabad Date : March 21, 2013 S. VENKAT RAMANA REDDY COMPANY SECRETARY
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RAIN COMMODITIES LIMITED NOTES:

1. A member entitled to attend and vote is entitled to appoint a proxy to attend and on a poll to vote instead of himself and such proxy need not be a member. The instrument appointing a proxy should, however, be deposited at the Registered Office of the Company not less than 48 hours before the meeting. The Register of Members and Share Transfer Books of the Company will remain closed from April 18, 2013 to April 27, 2013 (both days inclusive). Pursuant to the provisions of Section 205A(5) of the Companies Act, 1956, dividend for the financial year ended March 31, 1999 has been transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government pursuant to Section 205C of the Companies Act, 1956 and the dividend for the financial year ended March 31, 2006 and thereafter, which remain unclaimed for a period of 7 years will be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government pursuant to Section 205C of the Companies Act, 1956. Information in respect of such unclaimed dividend when due for transfer to the Investor Education and Protection Fund (IEPF) is given below: Sl. No. 1 2 3 4 5 6 7 8 Name of the Company Rain Calcining Limited* Rain Calcining Limited* Rain Commodities Limited Rain Commodities Limited Rain Commodities Limited Rain Commodities Limited Rain Commodities Limited Rain Commodities Limited For the Financial year ended March 31, 2006 March 31, 2007 March 31, 2007 December 31, 2007 December 31, 2008 December 31, 2009 December 31, 2010 December 31, 2011 Percentage of Dividend 8% 10% 35% 28% 37% 37% 46% 55% Date of Declaration September 29, 2006 August 1, 2007 August 3, 2007 June 25, 2008 June 17, 2009 June 7, 2010 May 12, 2011 April 25, 2012 Due date for transfer to the Investor Education and Protection Fund October 29, 2013 August 31, 2014 September 2, 2014 July 25, 2015 July 17, 2016 July 7, 2017 June 11, 2018 May 25, 2019
2. 3.
* Rain Calcining Limited is amalgamated with the Company. The Shareholders who have not encashed the dividend warrant(s) so far for the Financial Year ended March 31, 2006 and March 31, 2007 of Rain Calcining Limited and in case of the Company for the Financial Year ended March 31, 2007, December 31, 2007, December 31, 2008, December 31, 2009, December 31, 2010 and December 31, 2011 are requested to make their claim to the Secretarial Department, Rain Commodities Limited, Rain Center, 34, Srinagar colony, Hyderabad - 500073, Andhra Pradesh, India. 4. 5. The Company do not have demat suspense account. Dividend on equity shares @ 55% on the paid up Equity share capital i.e., Rs.1.10 per Equity Share as recommended by the Board of Directors, if declared by the Shareholders at the 38th Annual General Meeting, will be paid to those shareholders whose names appear on the Register of Members of the Company as on April 17, 2013 and also to the Beneficial Owners of equity shares held in electronic form as per the details furnished by the Depositories for this purpose as on the close of business hours on April 17, 2013. The Securities and Exchange Board of India (SEBI) and the Ministry of Corporate Affairs have made it mandatory for all the Listed Companies to offer Electronic Clearing Service (ECS) facilities for payment of dividend, wherever applicable. This facility offers various benefits like timely credit of dividend to the shareholders account, elimination of loss of instruments in transit or fraudulent encashment, etc.
6.
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In view of the above: (i) Shareholders holding shares in Physical Form and desirous of availing the facility are requested to complete ECS form attached to this Annual Report and forward the same to the Company's Registrar and Share Transfer Agent.
(ii) Shareholders holding shares in Dematerialized Form are requested to provide the Bank details to their Depository Participants for incorporation in their records. The Depository in turn would forward the required information to the Company. 7. The above information should be made available to the Company's Registrar and Share Transfer Agent M/s. Karvy Computershare Private Limited, (Unit: Rain Commodities Limited), Plot No.17 to 24, Vittal Rao Nagar, Madhapur, Hyderabad - 500 081, Andhra Pradesh, India on or before April 10, 2013. The Company's equity shares are Listed at (i) BSE Limited, Phiroze JeeJeebhoy Towers, Dalal Street, Mumbai400 001, (ii) National Stock Exchange of India Limited, Exchange Plaza, Floor 5, Plot No. C/1, Bandra (East), Mumbai - 400051 and (iii) The Delhi Stock Exchange Limited, DSE House, 3/1 Asaf Ali Road, New Delhi 110002 and the Company has paid the Annual Listing Fees to the said Stock Exchanges for the year 2012 -13. Members are requested to send all communication relating to shares (Physical and Electronic) to the Company's Registrar and Share Transfer Agent at Karvy Computershare Private Limited (Unit: Rain Commodities Limited), Plot No.17 to 24, Vittal Rao Nagar, Madhapur, Hyderabad - 500 081, Andhra Pradesh, India. By order of the Board for RAIN COMMODITIES LIMITED
8.
9.
Place: Hyderabad Date : March 21, 2013
S. VENKAT RAMANA REDDY COMPANY SECRETARY
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EXPLANATORY STATEMENT
(Pursuant to Section 173(2) of the Companies Act, 1956) ITEM NO.6 CPC Holdings USA LLC., (CPCUSA) is a step down wholly owned subsidiary company of Rain Commodities Limited. CPCUSA is the Holding Company for the Companies engaged in the business of Manufacture and sale of Calcined Petroleum Coke and Coal Tar Pitch in India and Outside India. Major portion of consolidated revenue of Rain Commodities Limited is contributed by the Companies situated outside India. Mr. Jagan Mohan Reddy Nellore is presently Managing Director of Rain Commodities Limited. It is proposed to appoint Mr. Jagan Mohan Reddy Nellore as Chief Executive Officer (CEO) of CPCUSA to oversee the operations outside India and also to provide strategy and guidance to the Senior Management of Subsidiary Companies situated outside India. The appointment of Mr. Jagan Mohan Reddy Nellore, Managing Director of the Company as CEO of CPCUSA shall be approved by members of the Company by way of Special Resolution in pursuance of the provisions of Section 314 of the Companies Act, 1956. The Board of Directors recommends the special resolution for your approval. Except Mr. Jagan Mohan Reddy Nellore, Mr. N. Radhakrishan Reddy and Mr. N. Sujith Kumar Reddy, no other Director is concerned or interested in this resolution. By order of the Board for RAIN COMMODITIES LIMITED
Place : Hyderabad Date : March 21, 2013
S. VENKAT RAMANA REDDY COMPANY SECRETARY
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DIRECTORS' REPORT
Dear Members, Your Directors have pleasure in presenting the 38th Annual Report and the Audited Financial Statements for the Financial Year ended December 31, 2012. FINANCIAL RESULTS A) STANDALONE: The Standalone performance for the Financial Year ended December 31, 2012 is as under: (Rs. in thousands) PARTICULARS Revenue from operations Profit before finance cost, depreciation and tax expense Finance cost Profit before depreciation and tax expense Depreciation Profit before tax expense Tax expense Profit After tax expense Profit brought forward from earlier year Profit available for appropriation Appropriations: Proposed dividend Tax on dividend Transfer to general reserve Transfer to capital redemption reserve Surplus in Statement of Profit and Loss 371,189 (2,660) 56,374 15,564 1,205,317 380,242 23,214 29,474 9,379 1,082,044 December 31, 2012 690,888 884,199 236,755 647,444 5,015 642,429 78,689 563,740 1,082,044 1,645,784 December 31, 2011 2,395,445 645,449 305,997 339,452 5,142 334,310 39,574 294,736 1,229,617 1,524,353
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B) CONSOLIDATED : The Consolidated performance for the Financial Year ended December 31, 2012 is as under: (Rs. in thousands) PARTICULARS Revenue from operations (net) Profit before finance cost, depreciation and amortization. Finance cost Profit before depreciation and Tax expense Depreciation and amortisation Profit before tax expense Provision for tax expense Profit after tax expense before minority interests Minority interest Profit after tax expense Profit brought forward from earlier year Profit available for appropriation Appropriations: Proposed dividend Tax on dividend Transfer to general reserve Transfer to capital redemption reserve Reversal of dividend Proposed in earlier year Surplus in Statement of Consolidated Profit and Loss OPERATIONS During the period under review, the Company has achieved revenue from operations of Rs. 690,888 (in thousands) and net profit of Rs. 563,740 (in thousands) on a standalone basis. During the same period, the Company has achieved net revenue from operations of Rs. 53,614,485 (in thousands) and net profit of Rs. 4,577,488 (in thousands) on a consolidated basis. OVERVIEW OF CARBON PRODUCTS BUSINESS Rain Commodities Limited, through its wholly owned subsidiaries, is engaged in the business of production and sale of Calcined Petroleum Coke ("CPC"), Co-generation of Energy (Steam and/or Electricity) through Waste-heat recovery and trading of Fuel Grade Petroleum Coke. Rain Group is currently operating seven CPC plants in United States, one CPC plant each in India and China. With the total CPC capacity of about 2.4 million tons, Rain Group is one of the leading producers of CPC in the World with a Global market share of about 8%. Rain Group is well known for its ability to co-generate Energy from the waste heat recovered in the calcining process. Currently Rain Group is co-generating Energy at four of its CPC plants in the United States and one CPC plant in India. 371,189 58,746 95,983 15,564 21,046,248 380,242 61,895 149,908 9,379 (26,021) 17,010,242 December 31, 2012 53,614,485 11,755,669 3,727,632 8,028,037 1,199,682 6,828,355 2,180,220 4,648,135 (70,647) 4,577,488 17,010,242 21,587,730 December 31, 2011 56,395,150 13,657,564 2,455,560 11,202,004 1,129,391 10,072,613 3,425,533 6,647,080 (5,832) 6,641,248 10,944,397 17,585,645
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In addition to the revenues generated from the sale of energy to third-parties, these co-generation facilities also reduce our energy costs and dependence on third party suppliers for sourcing electricity. Rain Group owns and operates dedicated deep-water vessel loading terminals at three of the CPC facilities (Lake Charles, Chalmette and Gramercy) and a barge dock at West Virginia CPC facility in the Unites States. Rain Group also operates two full-service petroleum coke laboratories. The Group has recorded net revenue of Rs. 44,356,811 (in thousands) from the Carbon Products Business during the financial year ended December 31, 2012 as compared to net revenue of Rs. 47,528,071 (in thousands) during the year ended December 31, 2011. Rain Group has diversified its end markets with entry into Coal Tar distillation business through the acquisition of Belgium based Ruetgers Group ("Ruetgers") on January 4, 2013. Ruetgers is Europe's leading and world's second largest Coal Tar distiller and is a leading producer of Coal Tar Pitch ("CTP" or "Pitch"). Ruetgers also produces other Chemicals, Resins, Modifiers and Superplasticizers by further processing carbon products through its down-stream operations. With eight operating facilities spread across North America and Europe, Ruetgers currently has more than a million tons of Coal Tar distillation capacity. The ninth facility, a Joint Venture in Russia with about 300,000 tons of coal tar distillation capacity is under construction and is expected to commence operations in CY 2014. OUTLOOK FOR CARBON PRODUCTS BUSINESS Calcined Petroleum Coke ("CPC") is produced from Green Petroleum Coke ("GPC"), a by-product of Crude Oil Refining process, through a process known as "Calcining" that removes moisture and volatile matter from GPC at high temperature. The key raw material for Ruetgers is Coal Tar, a by-product by Steel producers in the conversion process of Coal into Metallurgical Coke. Together, CPC and CTP comprise the critical component of Carbon Anodes used in the Aluminum smelting process. CPC and CTP are considered as essential materials for the Aluminum industry, as there are no known economically viable substitutes for these products. As per the recent industry reports, approximately 77% of the world's CPC production and 80% of the world's CTP production is used in the production of Carbon Anodes in the Aluminum Smelting Process. Demand for Aluminum is one of the most important determinants of CPC and CTP demand. World production of primary Aluminum totaled approximately 47.1 million metric tons in 2012 and is expected to grow to approximately 59.6 million metric tons by 2016, representing a compounded annual growth rate of 6.1%. The growth in the demand for Aluminum is expected to be driven by increasing use of light weight materials in many key industries such as transportation (including aerospace and automobiles), construction, packaging and consumer electronics. This demand growth is expected to be met through the addition of new Aluminum smelters, largely in Asia and the Middle East due to low cost structure in these regions, including low cost power, labor and raw materials. The performance of Rain Group, being one of the leading producers of CPC and CTP with operating facilities across Globe is expected to be reasonably strong in the medium term with the continued demand from the growing Aluminum industry and the long term relationship with Aluminum Smelters, Crude Oil Refineries and Steel Producers. OVERVIEW OF CEMENT BUSINESS Rain Commodities Limited, through its wholly owned subsidiary, is engaged in the business of production and sale of Cement. Rain Group is operating two fully integrated Cement plants in the state of Andhra Pradesh and one Fly Ash Handling and Cement Packing facility in the state of Karnataka. Rain Group through its vast chain of dealer network sells Cement, under the brand name "Priya Cement", in the states of Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra OUTLOOK FOR CEMENT INDUSTRY The Indian Cement industry has witnessed massive capacity additions of approximately 100 million tons, CAGR of 13.6%, during FY 2009-2012, the growth in capacity addition is disproportionately high in South India. During the same period of FY 2009-2012, South Indian Cement Capacity has increased by approximately 55 million tons, representing a CAGR of 22.5%. This has resulted in significant pressure on price realization and also on capacity utilizations. Although the estimated capacity utilization, for FY 2012-2013, on Pan India basis is around 75% levels, South India's capacity utilization is estimated to fall below 60% level.
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The increased thrust on infrastructure development by Government of India and the projected growth in the housing sector coupled with the increasing per capita income is expected to provide support to the Cement prices and hedge against the current oversupply situation. With the initiatives taken by the Government of India for infrastructure development coupled with many state elections in FY 2013 and central elections in FY 2014, Cement demand is expected to rise marginally during FY 2012-2014. The management expects that the supply demand gap would narrow down in next couple of years, as there are no major capacity expansions expected post FY 2013. Considering these market conditions and continued excess capacity in South India, the management continues to concentrate on controlling costs by improving the Cement to Clinker blend ratio and trying to improve the capacity utilization and blended realization by entering into new market regions in Karnataka and Maharashtra. DIVIDEND The Board of Directors of the Company have recommended a Dividend @ 55% on the Paid up Equity Share Capital of the Company, i.e., Rs.1.10 per Equity Share for the financial year ended December 31, 2012. BUYBACK OF EQUITY SHARES The Board of Directors at their meeting held on August 13, 2012 have approved to buy back upto maximum of 1,27,00,000 equity shares and minimum of 31,75,000 equity shares of Rs. 2/- each at a price not exceeding Rs. 46 per equity share for a maximum amount not exceeding Rs. 46 Crores through open market operations on Stock Exchange. The members of the Company have approved buyback of equity shares on October 1, 2012 through Postal Ballot. The Buy-back commenced on October 22, 2012 and last date for completion of buy-back is March 25, 2013 or the date on which total maximum of 1,27,00,000 equity shares would have been bought back or total deployed amount of Rs. 46 cores is exhausted. The Company has bought back 7,801,056 equity shares through electronic mode as on March 20, 2013 and incurred an amount of Rs.296,428.78 (in thousands) towards buy-back of shares. The Board of Directors of the Company, during their meeting held on October 25, 2011, approved the buyback of 10,000,000 equity shares of Rs. 2/- each at maximum price of Rs. 41/- per share for an amount not exceeding Rs. 350,000,000. The Buyback Offer was opened on November 14, 2011 and closed on March 29, 2012. The Company has bought back 100% of maximum number of 10,000,000 equity shares approved by the Board of Directors and the amount invested for buyback is Rs.321,183.79 (in thousands). LISTING OF EQUITY SHARES The Company's Equity shares are listed at the following Stock Exchanges: (i) BSE Limited, Phiroze JeeJeebhoy Towers, Dalal Street, Mumbai-400 001;
(ii) National Stock Exchange of India Limited, Exchange Plaza, Floor 5, Plot No. C/1, G Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400051; and (iii) The Delhi Stock Exchange Limited, DSE House, 3/1 Asaf Ali Road, New Delhi - 110002. The Company has paid the Annual Listing Fees to the said Stock Exchanges for the financial year 2012-13. SUBSIDIARY COMPANIES The Ministry of Corporate Affairs (MCA), New Delhi, vide its Circular No.51/12/2007-CL-III, dated February 8, 2011 and Circular No.5/12/2007-CL-III, dated February 21, 2011 has granted general exemption from attaching the annual accounts of the Subsidiary Companies to the Annual Report of the Holding Company under Section 212(8) of the Companies Act, 1956. Based on the circular, the Board of Directors at its meeting held on February 20, 2013 gave their consent for not attaching the Subsidiary Companies' Financial Statements, Auditors Report and Directors Report to the Annual Report of the Company for the Financial Year ended December 31, 2012. Your Company will provide copies of the Annual Accounts of the Subsidiary Companies and other related information upon request by any member of your Company or its Subsidiary Companies. The Annual Accounts of the
21

Subsidiary Companies are also kept at the registered office of the Company and the Subsidiary Companies, for inspection by any investor. The information of Subsidiary Companies as required to be disclosed as per the directions given by MCA is enclosed and forms part of the Annual Report. CONSOLIDATED FINANCIAL STATEMENTS As prescribed by Accounting Standard 21 issued by the Institute of Chartered Accountants of India, the Audited Consolidated Financial Statements are annexed. The Company has consolidated the Financial Statements of Rain Cements Limited; Rain CII Carbon (Vizag) Limited; Rain Coke Limited; Renuka Cement Limited; Rain Commodities (USA) Inc; Moonglow Company Business Inc, BVI; Rain Global Services LLC; RGS Egypt Limited; Rain Carbon USA, LLC; Carbon Holdings USA, LLC; CPC Holdings USA, LLC; Rain CII Carbon LLC; CII Carbon Corp; Rain CII Carbon Mauritius Limited; Zhenjiang Xin Tian Tansu Co. Ltd; Rain CTP Inc; Rain Escrow Corp; 9274 5520 Quebec Inc; Rain (0952853) Holdings Ltd. FIXED DEPOSITS The Company has not accepted any deposits from the public in terms of Section 58A of the Companies Act, 1956. DIRECTORS Mr. N. Radhakrishna Reddy and Mr. S.L. Rao, Directors of the Company who retires by rotation and being eligible offer themselves for reappointment. AUDITORS M/s. Deloitte Haskins & Sells, Chartered Accountants, Statutory Auditors of the Company who retires at the ensuing Annual General Meeting have not offered themselves for re-appointment. Your Company proposes to appoint M/s. B S R & Associates, Chartered Accountants (ICAI Regn. No.116231W) as its Statutory Auditors from the conclusion of the 38th Annual General Meeting till the conclusion of the 39th Annual General Meeting. M/s. B S R & Associates, Chartered Accountants have confirmed that their appointment, if made, shall be in accordance with the provisions of Section 224(1B) of the Companies Act, 1956. DIRECTORS RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 217(2AA) OF THE COMPANIES ACT, 1956 Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to the Directors' Responsibility Statement, the Board of Directors of the Company hereby confirms: (i) That in the preparation of the Annual Accounts for the Financial year ended December 31, 2012, the applicable accounting standards have been followed;
(ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at December 31, 2012 and of statement of Profit and Loss of the Company for the period ended December 31, 2012; (iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and (iv) That the Directors have prepared the Annual Accounts for the Financial Year ended December 31, 2012 on a going concern basis. AUDITORS REPORT There are no qualifications in Auditors Report. AUDIT COMMITTEE Audit Committee consists of the following Directors namely Mr. S.L.Rao, Chairman, Mr. Dipankar Basu, Member, Mr. H.L.Zutshi, Member, Mr. Yogesh Rastogi, Member, Mr. E S Ravisekar, Member and Mr. G. Krishna Prasad, Member. All the members of the Audit Committee are independent Directors. CORPORATE GOVERNANCE A separate report on Corporate Governance and Management Discussion and Analysis is annexed as part of the Annual Report along with the Auditor's Certificate on its compliance.
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INFORMATION RELATING TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO AND PARTICULARS OF EMPLOYEES. Information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 217(1)(e) of the Act read with Rule 2 of the Companies (Disclosures of Particulars in the Report of the Board of Directors) Rules, 1988 and information on particulars of employees under Section 217(2A) of the Act read with the Companies (Particulars of Employees) Rules, 1975 (as amended) form part of this Report. CORPORATE SOCIAL RESPONSIBILITY (CSR) Corporate Social Responsibility is commitment of the Company to improve the quality of life of the workforce and their families and also the community and society at large. The Company believes in undertaking business in such a way that it leads to overall development of all stake holders and Society. Education In order to provide better educational facilities, Rain Cements Limited, a wholly owned subsidiary is maintaining schools at plant location and imparting education in English medium. The school provides education from LKG to 10th Standard to the children of the employees and also the students of surrounding villages near the plant. Health In order to provide good health facilities, Rain Cements Limited, a wholly owned subsidiary is maintaining hospital at Plant locations. The hospitals provide medical treatment to the workers and their families and also people living in surrounding villages near the plant location. Rain Cements Limited, a wholly owned subsidiary has ambulance service facilities at its plant locations and also conducts medical camps regularly. Environment The Company has taken initiatives to reduce the pollution. Anti-pollution measures taken by the Company help minimize the impact of industrial process on the environment. Pragnya Priya Foundation Pragnya Priya Foundation is established under section 25 of the Companies Act, 1956 as a Non-Profit Organisation to grant donations to poor and the needy for meeting expenditure of education, medical treatments and any other charitable purpose; to establish, run, support and grant aid or other financial assistance to schools, colleges, libraries, reading rooms, universities, laboratories, research and other institutions of the like nature in India. The Company through its subsidiaries namely Rain Cements Limited and Rain CII Carbon (Vizag) Limited contributed donation of Rs.50 lakhs each to the foundation for providing Scholarships to Economically Backward students as part of Corporate Social Responsibility. The Pragnya Priya Foundation has disbursed Scholarships to 373 students for the period 2012-2013. ACKNOWLEDGEMENTS The Directors take this opportunity to place on record their sincere thanks to the Banks and Financial Institutions, Insurance Companies, Central and State Government Departments and the shareholders for their support and co-operation extended to the Company from time to time. Directors are pleased to record their appreciation of the sincere and dedicated services of the employees and workmen at all levels. On behalf of the Board of Directors for RAIN COMMODITIES LIMITED N. Jagan Mohan Reddy Managing Director Place: Hyderabad Date : March 21, 2013 N. Sujith Kumar Reddy Director
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ANNEXURE TO DIRECTORS' REPORT

Information under section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 and forming part of Directors Report for the financial year ended December 31, 2012. A. CONSERVATION OF ENERGY. (a) Energy conservation measures taken: -Nil(b) Additional investments and proposals, if any, being implemented for reduction of consumption of Energy -Nil(c) Impact of the measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production of goods. - N.A.-
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(d) Total energy consumption and energy consumption per unit of production as per Form A is given below: FORM - A Disclosure of particulars with respect to conservation of Energy Particulars A. Power and Fuel Consumption 1. ELECTRICITY a) Purchased Units (Kwh) Total Cost (Rs.) Rate/Unit (Rs.) b) Own Generation i) Through diesel Generator Units (Kwh) Units per Litre of Furnace Oil/HSD (No) Cost/Unit (Rs.) ii) Through Steam turbine/Generator Units (Kwh) Units per litre of fuel Oil / Gas Cost/Units (Rs.) 2 COAL Quantity (Tonnes) Total Cost (Rs.) Average Rate (Rs.) 3 FURNACE OIL Quantity (Liters) Total Cost (Rs.) Average Rate (Rs.) 4 Other Fuels (HSD OIL & LUB OIL) Quantity (Liters) Total Cost (Rs.) Average Rate (Rs.) 5 Consumption per Metric tonne of Cement Production Production (Cement) Electricity (Kwh) Furnace Oil (Liters) Coal (%) HSD (Liters) B. TECHNOLOGY ABSORPTION: Efforts made in technology absorption as per Form B: N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. January 1, 2012 to December 31, 2012 January 1, 2011 to December 31, 2011
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FORM - B Form for disclosure of particulars with respect to absorption RESEARCH AND DEVELOPMENT (R&D): 1. 2. 3. 4. Specific areas in which R & D carried out by the Company Benefits derived as a result of the above R & D. Future plan of action Expenditure on R&D : : : : N.A. N.A. N.A. N.A.
TECHNOLOGY ABSORPTION, ADOPTATION AND INNOVATION 1. 2. 3. Efforts, in brief, made towards technology absorption, adaptation and innovation Benefits derived as a result of the above efforts, e.g. Product development, import substitution, etc. In case of imported technology (imported during the last 5 years reckoned from the beginning of the Financial year), following information may be furnished a) b) c) d) C Technology imported Year of Import Has Technology been fully absorbed If not fully absorbed, area where this has not taken place reasons there for and future plans of action : N.A.
: :
N.A. N.A.
: : : :
N.A. N.A. N.A. N.A.
FOREIGN EXCHANGE EARNINGS AND OUTGO: a) Activities relating to exports; initiatives taken to increase exports; development of new export markets for products and services and export plans Total foreign exchange used and earned : January 1, 2012 to December 31, 2012 (i) Foreign Exchange earned 338,365 1,667,400 (ii) Foreign Exchange Used : The Company is engaged in Trading in Green Petroleum Coke (GPC). (Rs. In thousands) January 1, 2011 to December 31, 2011 271,746 2,438,600
b)
On behalf of the Board of Directors for RAIN COMMODITIES LIMITED
N. Jagan Mohan Reddy Managing Director
N. Sujith Kumar Reddy Director
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Annexure to the Directors Report
Statement of particulars of employees pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 (as amended) and forming part of the Directors' Report for the Financial year ended December 31, 2012
Designation/ Nature of Duty Managing Director 26,829,019 Chief Financial Officer 5,499,965* B.Com, FCA 22 Years B.S.I.E. (U.S.A) 20 Years Gross Remuneration (Rupees) Qualification Experience in years Date of Particulars of commencement last of employment employment August 10, 1994 Managing Director Rain Calcining Ltd. April 1, 2012
Sl. Name of the Employee & No (Age)
1.
Mr. N. Jagan Mohan Reddy (45 years)
2.
Mr. T Srinivasa Rao ( 46 years)
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Vice President (Finance) Rain CII Carbon (Vizag) Ltd
Notes:
1.
Gross Remuneration includes salary, taxable allowances, commission, value of perquisites as per the Income-tax Rules, 1962.
2.
The nature of employment is contractual.
3.
None of the above are related to each other.
4.
*Remuneration particulars are for part of the Year i.e., from April, 2012 to December, 2012.
By order of the Board for RAIN COMMODITIES LIMITED N. Jagan Mohan Reddy Managing Director N. Sujith Kumar Reddy Director
MANAGEMENT DISCUSSION AND ANALYSIS

A) CARBON PRODUCTS CPC INDUSTRY STRUCTURE AND DEVELOPMENT Calcined Petroleum Coke ("CPC") is produced from Green Petroleum Coke ("GPC"), a by-product of Crude Oil Refining process, through a process known as "Calcining" that removes moisture and volatile matter from the GPC at high temperature. CPC is produced in two primary forms, Anode Grade CPC for use in the Aluminum Smelting process (representing approximately 77% of Global CPC production) and Industrial Grade CPC for use in the manufacturing of Titanium Dioxide and other industrial applications (representing approximately 23% of Global CPC production). For every 10 tons of Aluminum, approximately 4 tons of CPC is consumed in the Aluminum production process. The World CPC production for 2012 is estimated to be about 26 million tons, China and US accounts for approximately 66% of the total World production. World CPC Production - 2012 Estimated of CPC pricing changes is determined by individual customer contracts and typically ranges between three to six months. CTP INDUSTRY STRUCTURE AND DEVELOPMENT Coal Tar is a liquid by-product produced by the Steel producers in the conversion process of Coal into Metallurgical Coke. During the production of Metallurgical Coke, known as "coking," 80% of the coal volume is processed into Metallurgical Coke. Metallurgical coke is used as an important reducing agent and energy source in blast furnaces for the production of pig iron and steel. Thus, the supply of Coal Tar is correlated to Pig Iron production, which in turn is driven by steel production. Coal Tar is considered as a by-product of the metallurgical coke and steel industries and is sold to Coal Tar distillers. The Coal Tar distillation business can be grouped into two categories, the primary coal tar distillation business ("primary distillation") and the processing of selected co-products of primary distillation into more refined products ("downstream"). Primary distillation products include CTP, which represents approximately half of the distillation yield, naphthalene oil and aromatic oils. While the graphite and chemical industries are among the end users of CTP, approximately 80% of the world production of CTP is consumed in the Aluminum smelting process. For every 10 tons of Aluminum, approximately 1 ton of CTP is consumed in the Aluminum production process. The World CTP production for 2012 is estimated to be about 6 million tons, China and North America accounts for approximately 54% of the total World production. World CTP Production - 2012 Estimated
Chaina 49% Middle East/Africa 6%
CIS 6% South America 3% Canada 2% Europe 6% Asia (Ex. China) 11% US 17%
We estimate that over 130 Oil Refineries world-wide produce and sell GPC in varying forms and qualities. Sale of GPC generally do not constitute a material portion of Refiners' revenues (typically about 1 to 2% of their total sales). The price of GPC depends on the quality and the market in which it will be used, and is largely driven by market supply and demand. A refinery typically realizes higher prices for GPC used in the production of Anode Grade CPC than that used in Industrial Grade CPC. However, the quality of GPC (whether anode-grade or industrial grade) cannot be modified by Refinery and the same largely depends on the type of crude being refined. In general CPC and GPC prices move in parallel, as a result, CPC producers typically pass through GPC cost increases and decreases to their customers. However, there could be a timing lag for CPC prices to adjust to changes in GPC prices, as the frequency
Africa/Australia 4%
CIS 10%
China 48%
South America 3%
Europe 14%
Asia (Ex. China) 15%
North America 6%
The growth in demand for both CPC and CTP is primarily depend on the growth in production and
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demand for Aluminum, as about 77% of global CPC production and about 80% of global CTP production is consumed by Aluminum industry for the production of Carbon Anodes in the Aluminum smelting process. World CPC demand by end use Aluminum smelters, largely in Asia and the Middle East due to a lower cost structure in these regions, including lower cost power, labor and raw materials. World Aluminum Consumption Growth CY 2011 2016 (million tons)
Non-Anode China 12%
46.7
49.6
52.7
55.8
59.0
Needle Coke 3% Other industries 4% Titanium Dioxide 4%
Aluminum industry 77%
CY 2012E CY 2013E CY 2014E CY 2015E CY 2016E

World Aluminum Production Growth CY 2011 2016 (million tons)
World CTP demand by end use

Other Industries 9%
47.1
49.9
53.5
56.8
59.6
Electrodes 10%
Aluminum industry 81%
CY 2012E CY 2013E CY 2014E CY 2015E CY 2016E

Source: Industry and Management Estimate
Business and Growth Strategies Leverage Rain Group's and Ruetgers' proven leadership to maximize efficiency across the combined company We intend to maximize efficiencies and minimize costs across the combined company. Both Rain Group and Ruetgers have significant experience executing on cost reduction initiatives. Additionally, we intend to reduce administrative expenses by combining Rain Group's and Ruetgers' marketing, information technology, finance and accounting functions. Expand on current market leadership positions in the Calcining and Coal Tar distillation industries Current CPC market conditions favor a CPC supplier that can take advantage of the growth in demand for CPC while maintaining stable sources of GPC supply. We intend to expand our current market leading position by maintaining our long-term, strategic relationships with suppliers, seeking opportunities to
Source: Industry and Management
Demand for Aluminum is one of the most important determinants of CPC and CTP demand. According to the recent industry estimates, world demand for primary Aluminum totaled approximately 46.7 million metric tons in 2012 and is expected to grow to approximately 59.0 million metric tons by 2016, representing a compounded annual growth rate of 6.0%. The growth in the demand for Aluminum is expected to be driven by increasing use of light weight materials in many key industries such as transportation (including aerospace and automobiles), construction, packaging and consumer electronics. In line with the growing demand, even the global primary Aluminum production is also expected to grow at an average CAGR of 6.1% between 2012 and 2016, this production growth is expected to be met through the addition of new
29

enter into additional longer-term supply contracts and expanding our use of NTACs. In the Coal Tar distillation industry, Ruetgers aims to use its leading market position and track record to selectively grow distillation capacities in its core markets. Ruetgers intends to continue investing in its facilities and developing its processes to further improve its operational reliability to grow its primary coal tar distillation activities in line with increases in customer demand. To grow its CTP output, Ruetgers entered into the Russian JV, from which we expect to gain additional coal tar distillation capacity of 300,000 metric tons per year in 2014. We intend to leverage the Russian JV, which is logistically well-positioned to supply the Middle East, to provide the combined company with a reliable source of Coal Tar to expand market share in the Middle East, which is experiencing a steady increase in the demand for pitch. Pursue higher-margin downstream product offerings and develop new products We believe the scale of the combined company will provide us with a platform to continue to develop higher-margin downstream products. In addition to providing us with a long-term and reliable source of coal tar supply, the Russian JV offers us the flexibility to increase the volume of co-products resulting from primary coal tar distillation, which we plan to use to increase the production of higher-margin downstream products. The combined company intends to support process improvement and the development of new, higher margin products and technologies through its research and development initiatives, with a focus on performance, sustainability and utilization of alternative raw materials. Continue to opportunistically grow in emerging markets We intend to continue to opportunistically expand our footprint in emerging economies, including Asia. Aluminum smelting has grown substantially in China and India. The Acquisition better positions the combined company for expansion into these emerging markets. We believe the ability to supply our customers with multiple products helps solidify our existing relationships with Aluminum Smelters. Increase profitability and free cash flow generation We believe that we have demonstrated an ability to remain profitable throughout the recent economic cycle and at varying levels of Aluminum production and CPC capacity utilization. In particular, we believe our technology development, including our patented ICE technology, allows us to increase sales volumes and reduce costs as non-anode GPC alternatives are cheaper and more readily available than traditional anode grade GPC. RISKS AND CONCERNS The key limitations to increasing the supply of CPC include the location of suitable new sites to facilitate production in close proximity to refiners and the quantity of available suitable quality GPC. GPC is a by-product of the oil refining process and is not produced with a view toward meeting the supply needs of the World's Aluminum or Titanium producers. Changes in the economics of oil refiners over the past 15 to 20 years have resulted in a trend toward refining heavier and more Sour Crude oils. While refiners continue to build refining capacity (and therefore indirectly GPC production capacity), the worldwide supply of traditional Anode Grade GPC is expected to grow at lesser pace as refineries processing more Sour Crude oil, which results in lower quality, or fuel grade,GPC. As a result, global CPC producers have experienced and may continue to experience a reduction in the availability of the quality raw materials they require. To economically and efficiently support growth in the Aluminum industry, Rain Group believes that smelters and calciners will need to continue to work together to expand the existing quality specifications for CPC, and allow for more non-traditional alternative coke blends in the Anode Grade CPC production process. RCC's patented ICE technology is one method of utilizing lower cost coke inputs in CPC blends without compromising the product quality. The principal consumers of Rain Group's CPC and CTP are primary Aluminum smelters. Although the Aluminum industry has experienced growth on a long-term basis, there may be cyclical periods of weak demand which could result in decreased primary Aluminum production. Rain Group' sales have historically declined during such cyclical periods of weak global demand for Aluminum.
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B) CEMENT CEMENT INDUSTRY DEVELOPMENT STRUCTURE AND
7.2% 5.6% 5.8% 6.0% 6.0% 6.5%
Infrastructure spending as a % of GDP

8.2%
9.3%
The Indian Cement industry with about 300 million tons of capacity is the world's second largest cement producer. The demand for Cement, being a derived demand, depends primarily on the general industrial activity, real estate activity and investment in the infrastructure sector. Indian Cement industry is globally competitive because the industry has witnessed healthy trends such as continuous technology up gradation and cost controlling. Due to the sub dued operating profits, as result of lower capacity utilizations, capped cement prices and constantly raising input costs, some of the companies have deferred their expansion plans. With strong demand coupled with limited capacity additions, the Cement capacity utilizations are expected to slowly improve after FY2013 and should see 80% mark by FY 15. Cement Consumption by sector
FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
FY 2010
FY 2011E
FY 2012E
Source: Planning Commission and Management Estimate
With the increased thrust on infrastructure development by Government of India, projected growth in the housing sector, increasing per capita income coupled with many state elections in FY 2013 and central elections in FY 2014 are expected to provide support to the Cement prices and help improve the Cement demand and capacity utilizations during near to long term. Cement Demand YOY Growth rate %
9.9% 9.1% 10.8% 7.6% 8.1% 6.2% 3.7% 5.0% 7.0% 7.9%
FY 2006
FY 2007
FY 2008
FY 2009
FY 2010
FY 2011
FY 2012
FY 2013E
FY 2014E
FY 2015E
Source: Management Estimate and Industry

Irrigation 23%
90%
Cement Industry Utilization Rates %

94% 96% 88% 83% 77% 74% 75% 79% 80%
Housing 53% Defence 4% Roads 5%

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013E FY 2014E FY 2015E
RISKS AND CONCERNS

Infrastructure 15%
OPPORTUNITIES AND THREATS Opportunities Despite apprehensions about the impact of inflation and slowdown in Industrial production and overall economic scenario, the demand prospect for the Cement sector remains positive with the growth in Infrastructure, Housing, Roads, Ports, Power, Urban Housing and Irrigation Projects. The Government's thrust towards Infrastructure development, which accounts for about 20% of total Indian Cement consumption, is expected to lead the infrastructure spending of more than 10% of Indian GDP by 2017.
The Indian Cement industry has witnessed massive capacity additions of approximately 100 million tons, CAGR of 13.6%, during FY 2009-2012, the growth in capacity addition is disproportionately high in South India. During the same period of FY 2009-2012, South Indian Cement Capacity has increased by approximately 55 million tons, representing a CAGR of 22.5%. This has resulted in significant pressure on price realization and also on capacity utilizations. Although the estimated capacity utilization, for FY 2012-2013, on Pan India basis is still around 75% levels, South India's capacity utilization is estimated to fall below 60% level. Energy (Power and fuel) constitute more than 40% of the total operating costs of Cement industry. Rise in electricity prices coupled with hikes in Diesel and Domestic Coal Prices are causing constant increase
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in Energy costs. Further the severe energy shortage in the state of Andhra Pradesh is dampening the production and forcing the use of Diesel Generators and other high cost power sources. Further the increased dependence on imported coal and pet coke as an alternative to the domestic coal is exposing the Indian Cement industry to price fluctuations in International markets and the depreciation of rupee is also resulting in higher costs thus adding further pressure on profitability. Considering these market conditions and continued excess capacity in South India, the management continues to concentrate on controlling costs by improving the Cement to Clinker blend ratio and trying to improve the capacity utilization and blended realization by entering into new market regions in Karnataka and Maharashtra. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has adequate internal control systems and procedures with regards to purchase of stores, raw materials including components, plant and machinery equipment, sale of goods and other assets. The Company has clearly defined roles and responsibilities for all managerial positions and all operating parameters are monitored and controlled. The Company has appointed M/s. Ernst & Young Private Limited as the Internal Auditors and they will submit a report on a quarterly basis to the Audit Committee for its review and recommendation. DISCUSSION ON FINANCIAL PERFORMANCE During the year under review the Company has achieved net revenue from operations of Rs. 690,888 (in thousands) on standalone basis and net revenue from operations of Rs. 53,614,485 (in thousands) on consolidated basis. During the year the Company has achieved a net profit of Rs. 563,740 (in thousands) on standalone basis and achieved net profit of Rs. 4,577,488 (in thousands) on consolidated basis. The Basic and Diluted Earnings Per Share of the Company as on December 31, 2012 is Rs. 1.65 on Standalone basis and Rs. 13.25 on Consolidated basis. The Paid up Share Capital of the Company as on December 31, 2012 is Rs. 683,403 (in thousands) comprising of 341,701,602 Equity Shares of Rs. 2/each fully paid-up. HUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATIONS The Company believes that the quality of its employees is the key to its success in the long run and is committed to provide necessary human resource development and training opportunities to equip them with skill, enabling them to adapt to contemporary technological advancements. Industrial relations during the year continued to be cordial and the Company is committed to maintain good industrial relations through negotiations and meetings. The Company employs approximately 1,324 employees directly and indirectly through its Subsidiary companies across United States, India and China. CAUTIONARY STATEMENT Statements in the Management Discussion and Analysis describing the Company's objectives, projections, estimates, expectations may be forward-looking statements. Actual results may differ materially from those expressed or implied. Important factors that could make a difference to the Company's operations include economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws, statutes and other incidental factors. On behalf of the Board of Directors for RAIN COMMODITIES LIMITED N. Jagan Mohan Reddy Managing Director Place: Hyderabad Date : February 20, 2013 N. Sujith Kumar Reddy Director
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REPORT ON CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges in India, compliance with the requirements of Corporate Governance is set out below: 1. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE: Rain Commodities Limited ("RCOL"/the "Company") is committed to implement sound corporate governance practices with a view to bring about transparency in its operations and maximize shareholder value. The Company's core philosophy on the code of Corporate Governance is to ensure: Fair and transparent business practices; Accountability for performance; Compliance of applicable statute; Transparent and timely disclosure of financial and management information; Effective management control and monitoring of executive performance by the Board; and Adequate representation of promoter, executive and independent directors on the Board. 2. BOARD OF DIRECTORS : The Board of Directors along with its Committees provides leadership and guidance to the Company's management and supervises the Company's performance. As at December 31, 2012, the Board of Directors ("Board") comprises of Nine Directors, of which eight are Non-Executive Directors. The Company has a non-executive chairman and six independent directors comprise more than half the total strength of the Board. The composition and category of the Board of Directors is as follows: Sl. No. 1 2 3 4 5 6 7 8 9 Name of the Director Mr. N. Radhakrishna Reddy Mr. N. Jagan Mohan Reddy Mr. N. Sujith Kumar Reddy Mr. S.L. Rao Mr. Dipankar Basu Mr. H.L. Zutshi Mr. G. Krishna Prasad Mr. E.S. Ravisekar Mr. Yogesh Rastogi Designation Chairman Managing Director Director Director Director Director Director Nominee Director Nominee Director Category Non - Executive Director (Promoter) Executive Director (Promoter) Non - Executive Director (Promoter) Independent Director Independent Director Independent Director Independent Director Independent Director -Nominee of IDBI Bank Limited Independent Director -Nominee of ICICI Bank Limited
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Other Directorships: The number of directorships and memberships in the committees of Other Companies held by the Directors as on December 31, 2012 are as under: Name of the Director Mr. N. Radhakrishna Reddy Mr. N. Jagan Mohan Reddy Mr.N. Sujith Kumar Reddy Mr. S.L. Rao Mr. Dipankar Basu Mr. H.L. Zutshi Mr. G. Krishna Prasad Mr. E.S. Ravisekar Mr. Yogesh Rastogi * No. of Other Directorships* 9 7 9 5 7 2 4 1 In Other Companies** Membership 1 2 2 4 Chairmanship 3 1 1 -
Includes directorships in the companies incorporated under the Companies Act, 1956
** Includes only Audit and Investor Grievances Committee None of the Directors hold Directorships in more than 15 Companies. Board Meetings: During the year ended December 31, 2012, Six Board Meetings were held as against the minimum requirement of four meetings. The maximum time gap between any of two consecutive meetings did not exceed four months. The dates on which the Board meetings were held are February 21, 2012, April 25, 2012, August 13, 2012, September 27, 2012, October 1, 2012 and November 2, 2012. Attendance of Directors at the meetings: The details of the attendance of the Directors at the Board meetings held during the year ended December 31, 2012 and at the last Annual General Meeting (AGM) are given below: Name of the Director Mr. N. Radhakrishna Reddy Mr. N. Jagan Mohan Reddy Mr. N. Sujith Kumar Reddy Mr. G. Krishna Prasad Mr. Yogesh Rastogi Mr. E.S. Ravisekar Mr. S L Rao Mr. Dipankar Basu Mr. H L Zutshi Number of Board Meetings Held Attended 6 6 6 6 6 6 6 6 6 6 5 6 5 1 4 4 3 5 Attendance at AGM Held on April 25, 2012 Yes Yes Yes Yes No Yes Yes Yes Yes
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Profile of Board of Directors Brief resume of the Directors, nature of their expertise in specific functional areas and name of Companies in which they hold directorship and the membership of the committees of the Board are furnished hereunder: Mr. N. Radhakrishna Reddy Mr. N. Radhakrishna Reddy (70 years) is the Chairman of Rain Commodities Limited. He has more than 44 years of experience in Construction and Cement Industry. Currently, he is also on the board of Rain Cements Limited, Renuka Cement Limited, Rain Coke Limited, PCL Financial Services Limited, Arunachala Holdings Private Limited, PR Cement Holdings Limited, Apeetha Enterprises Private Limited, Lakshmi Sea Foods Limited, Rain Entertainments Private Limited and Pragnya Priya Foundation. He has been a Director of the Company since 1984. Mr. N. Radhakrishna Reddy holds 10,383,730 equity shares in the Company. Mr. N Radhakrishna Reddy, Chairman is the father of Mr. N. Jagan Mohan Reddy, Managing Director and Mr. N. Sujith Kumar Reddy, Director. Other than the said Directors, he is not related to any other Director. Mr. N. Jagan Mohan Reddy Mr. N. Jagan Mohan Reddy (46 years) has a Bachelor of Science degree in Industrial Engineering from Purdue University, U.S.A. He is the founder of Rain CII Carbon (Vizag) Limited (successor of Rain Calcining Limited) that has started operations in 1998. He was instrumental in the acquisition of (i) Rain CII Carbon LLC (formerly CII Carbon LLC), a US based company, engaged in the business of manufacture and sale of Calcined Petroleum Coke (CPC) and generation of energy and (ii) RTGERS N.V., a Belgium-head quartered Coal Tar Pitch ("CTP") and Chemicals manufacturer. He is presently the Managing Director of Rain Commodities Limited and Director in Rain CII Carbon (Vizag) Limited, Rain Cements Limited, Rain Coke Limited, Renuka Cement Limited, Sujala Investments Private Limited, Focus India Brands Private Limited, Rain Entertainments Private Limited, Moonglow Company Business Inc, Rain Commodities (USA) Inc, Rain CII Carbon LLC, USA, Rain Global Services LLC USA, Rain CII Carbon Mauritius Limited and Pragnya Priya Foundation. Mr. N. Jagan Mohan Reddy holds 8,586,740 equity Shares in the Company. Mr. N. Jagan Mohan Reddy is son of Mr. N. Radhakrishna Reddy, Chairman and brother of Mr. N. Sujith Kumar Reddy, Director. Other than the said Directors, Mr. N Jagan Mohan Reddy is not connected to any other Director of the Company. Mr. N. Sujith Kumar Reddy Mr. N. Sujith Kumar Reddy, aged about 41 Years, holds a Bachelor's degree in Commerce. He has more than 18 years of experience in manufacturing and Construction Industry. He is the Managing Director of Rain Cements Limited, which manufactures and sells Cement under the brand name "Priya Cement". The Gross Turnover of Rain Cements Ltd is more than Rs.1,000 Crores. He is instrumental in doubling the Cement capacity to more than 3 million tons of Cement per annum and also building the strong dealer Network and increase of retail sales in Andhra Pradesh, Tamilnadu, Karnataka and Maharashtra States. He is also Director of Renuka Cement Limited, PCL Financial Services Limited, Arunachala Holdings Limited, Apeetha Enterprises Limited, Nivee Holdings Limited, Nivee Property Developers Private Limited, Rain Entertainments Private Limited and Pragnya Priya Foundation. Mr. N. Sujith Kumar Reddy holds 10,028,770 equity shares in the Company as on December 31, 2012. Mr. N. Sujith Kumar Reddy is son of Mr. N. Radhakrishna Reddy, Chairman and brother of Mr. N. Jagan Mohan Reddy, Managing Director. Other than the said Directors, he is not related to any other Director.
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Mr. Dipankar Basu Mr. Dipankar Basu (77 Years) was previously the Chairman of State Bank of India until his retirement in August 1995. While serving as Chairman of State Bank of India, he served concurrently on the Boards of a number of SBI subsidiaries including those engaged in investment banking and fund management. Between 1996 and 1999, Mr. Basu served as a member of the Disinvestment Commission set up to advise the Government of India on public sector disinvestments. During 1997-98, Mr. Basu was a member of the Narasimham Committee on Banking Sector Reforms. Later, during 2004-06, he was a member of the Appointments Board constituted by Government of India for selection of Chairman and Executive Directors of Public Sector Banks. Mr. Basu brings with him long experience and wide knowledge of financial markets in India. He has several years of Board level experience in companies engaged in a wide spectrum of businesses - both financial and non-financial. He is currently on the Boards of Chambal Fertilizers & Chemicals Ltd, The Peerless General Finance & Inv. Co. Ltd, SBI Cards and Payment Services Pvt Ltd, Asian Paints Ltd, Deepak Fertilizers & Petrochemicals Corp. Ltd, Peerless Securities Limited and Rain CII Carbon (Vizag) Limited. He is at present a member of the Investment Advisory Committee of Army Group Insurance Fund and of the Empowered Committee on External Commercial Borrowings of Reserve Bank of India. Mr. Basu received his Master of Arts (Economics) degree from Delhi University. Mr. S.L. Rao Mr. S L Rao (77 Years) is an eminent economist, Distinguished Emeritus Fellow at The Energy & Resources Institute (TERI), New Delhi, Member, Board of Governors, Institute for Social and Economic Change, Bangalore, IIM Lucknow, IIM Kozikode, CUTS Institute for Regulation and Competition, and Trustee, Bangalore International Centre, Aga Khan Foundation, India and Dakshinachtra Museum. He is on a number of Advisory Committees including of the Competition Commission of India, the Indian Energy Exchange. He is on the Boards of Honeywell Automation India Limited, Kanoria Chemicals and Industries Ltd, Global Truastcap Finance Pvt Ltd, Insight Alpha Pvt Ltd, Rain Commodities Ltd and Rain CII Carbon Vizag Ltd. He has served for many years on other corporate and institutional Boards. He is on or has been Chairman or Member of Audit Committees and Remuneration Committees of their Boards. He was Director-General, National Council of Applied Economic Research, Delhi from 1990 to 1996 and was the first Chairman of the Central Electricity Regulatory Commission. He spent 28 years in management positions in Unilever, Warner Hindustan and Beardsell, five years as management consultant and designed and ran the National Management Programme (1987 to 1990). He is a columnist in the "Telegraph", Kolkata, "Financial Express"and "Deccan Herald". He is a widely read commentator on policy issues in many national and international publications. He has authored or edited 15 books; the last 3 were "Powering India" (Academic Foundation, 2011), "From Servants or Masters? Evolution of Professional Management in India" history of professional management in India" (Global Business Press, 2007), and "Governing Power", (TERI Press, 2004). Mr. H L Zutshi Mr. H L Zutshi (70 Years) was the Chairman & Managing Director of Hindustan Petroleum Corporation Ltd.(HPCL). HPCL is engaged in petroleum refining, marketing and exploration activities and has an annual turnover of over USD 20 billion. He retired from HPCL in May 2002. HPCL was the successor company of ExxonMobil in India, after the latter's activities was taken over by the Government of India in 1974. Mr. Zutshi was also the Chairman of Mangalore Refineries and Petrochemicals Ltd (MRPL) a joint venture company between Aditya Birla Group of companies and HPCL, South Asia LPG Ltd. a joint venture between HPCL and TOTAL of France, HINCOL a joint venture between COLAS SA of France and HPCL and an Exploration & Production company called Prize Petroleum joint venture between HPCL and HDFC, ICICI and TDFC. He was a member of the Government of India appointed expert Sub-Committee for developing a policy paper on deregulation etc, which provided inputs for the Hydro Carbon Vision 2025. He was formerly Chairman of the Petroleum, Coal, Fertilizer and related products Division Council of Bureau of Indian Standards (BIS), New Delhi, Convener of the Financial Services Sector task force of the Department of Public Enterprises,
36

which fixed annual performance targets of the Financial Services PSU's. He was also Advisor Energy & Hydrocarbon to Mittal S.a.r.l, Luxomberg. He was formerly Independent Director on the Boards of MMTC, MECON Ltd and IDBI Bank Ltd. Mr. Zutshi is presently Chairman and Managing Trustee of the Energy Research and Social Advancement Foundation, New Delhi and also an Independent Director on the Boards of Jaguar Overseas Limited, Rain CII Carbon (Vizag) Limited and Rain Commodities, Hyderabad. Mr. Zutshi has had a brilliant academic record. He is an Honors Graduate in Mechanical Engineering and was trained in Management at the Administrative Staff College (Hyderabad), Indian Institute of Management (Ahmedabad) and Templeton College, Oxford University, UK. Mr. G. Krishna Prasad Mr. G. Krishna Prasad (43 Years) holds a Bachelor's degree in Electronics Engineering from India and a Masters degree in Computer Science from Wayne State University, Detroit. He worked earlier with Ford Motor Company in Detroit prior to starting his companies in India. Mr. G. Krishna Prasad is at present Managing Director in Emergency Dictation Software Services Private Limited and Tecra Systems Private Limited and Director in Srinija Infrastructure Private Limited and Rain Cements Limited. Mr. Yogesh Rastogi Mr. Yogesh Kumar Rastogi (43 years) holds Bachelor's degree in Electrical Engineering from IIT Delhi and PGDM from IIM, Ahmedabad. He is the Nominee Director of ICICI Bank Limited. He is working with ICICI Bank Limited as General Manager, Zonal Head-South, Corporate Banking, ICICI Bank Limited, Hyderabad. Mr. E.S. Ravisekar Mr. E.S. Ravisekar (60 years) is a post graduate in Science, Economics and Commerce and also done his Ph.D. He is the Nominee Director of IDBI Bank Limited. He has retired from IDBI in December, 2012. Prior to his retirement, he was the Director of Jawaharlal Nehru Institute of Banking and Finance, Mumbai. He is having more than 38 years of experience in Project Finance, Recovery Department, Training and Operations Departments. 3. Board Committees: The Company currently has the following committees of the Board: a) b) c) a) Audit Committee; Remuneration Committee; and Shareholders'/Investors' Grievance Committee. Audit Committee Composition: The Audit Committee was constituted by the Board with six Non- Executive Independent Directors, with Mr. S.L Rao as its Chairman. The Head of Finance and Accounts, Statutory Auditors and Internal Auditors attend the Audit Committee meetings on invitation and the Company Secretary acts as the Secretary of the Committee. The minutes of the meetings of the Audit Committee are circulated to all the members of the Board. Audit Committee meetings : Four Audit Committee Meetings were held during the year ended December 31, 2012. The maximum time gap between any of the two meetings was not more than four months. The Audit Committee meetings were held on February 21, 2012, April 25, 2012, August 13, 2012 and November 2, 2012.
37

Composition of the Audit Committee and the details of meetings held and attended by its members are given below: Name of the Director Mr. S L Rao Mr. DipankarBasu Mr. H L Zutshi Mr. G. Krishna Prasad Mr. Yogesh Rastogi Mr. E.S. Ravisekhar Terms of Reference: The terms of reference of the Audit Committee are as under: Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible. Recommending to the Board, the appointment, reappointment and if required the replacement of the statutory auditor and fixation of audit fees. Approval of payment to statutory auditors for any other services rendered by the statutory auditors. Reviewing, with the management, the annual financial statements before submission to the Board for approval, with particular reference to:
3
Designation Chairman Member Member Member Member Member
Number of Meetings Held 4 4 4 4 4 4 Attended 4 2 4 4 4
Matters required to be included in the Directors' Responsibility Statement to be included in the Board's report in terms of Clause (2AA) of Section 217 of the Companies Act, 1956; Changes, if any, in accounting policies and practices and reasons for the same; Major accounting entries involving estimates based on the exercise of judgment by management; Significant adjustments made in the financial statements arising out of audit findings; Compliance with listing and other legal requirements relating to financial statements; Disclosure of any related party transactions; and Qualifications in the draft audit report.
3 3 3 3 3 3
Reviewing with the management, the quarterly financial statements before submission to the Board for approval. Reviewing with the management, performance of statutory and internal auditors and adequacy of internal control systems. Reviewing the adequacy of internal audit function, reporting structure, coverage and frequency of internal audit. Discussion with internal auditors any significant findings and follow-up thereon. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control system of a material nature and reporting the matter to the Board. Discussion with statutory auditors prior to the commencement of audit, the nature and scope of audit and subsequent to audit to ascertain any areas of concern.
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To look into the reasons for substantial defaults in the payment to debenture holders, shareholders (in case of non-payment of declared dividend) and creditors. To review the functioning of the Whistle Blower mechanism. b) Remuneration Committee: Composition The Remuneration Committee has been constituted to formulate and recommend to the Board, the remuneration of the Managing Director, Whole-time Directors including performance bonus and perquisites. All the members of the Remuneration Committee are independent and Non-Executive Directors. Remuneration Committee meetings During the year ended December 31, 2012, no Remuneration Committee Meetings were held. Composition of the Committee is given below: Name of the Director Mr. S L Rao Mr. Dipankar Basu Mr. H L Zutshi Mr. G. Krishna Prasad Mr. Yogesh Rastogi Mr. E.S. Ravisekhar Remuneration policy The compensation of the executive directors comprises of fixed component and commission. The compensation is determined based on the remuneration prevailing in the industry and the performance of the Company. The remuneration package of the executive directors is periodically reviewed and suitable revision is recommended to the Board by the committee. The executive directors are not paid sitting fees for attending any meetings of Board/Committee. Details of remuneration to all the Directors Following are the details of sitting fees paid to the Directors for attending Board and Committee Meetings for the year ended December 31, 2012: Name of the Director Mr. N. Radhakrishna Reddy Mr. G. Krishna Prasad Mr. Yogesh Rastogi1 Mr. E.S. Ravisekar2 Mr. S L Rao Mr. Dipankar Basu Mr. H L Zutshi
1 2
Designation Chairman Member Member Member Member Member
Amount Rs. 1,20,000 1,80,000 20,000 1,60,000 1,60,000 1,00,000 1,80,000
Paid to ICICI Bank Limited Paid to IDBI Bank Limited
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The Remuneration paid to the Whole-time Directors during the year is as follows: Name of the Director and Designation Mr. N. Jagan Mohan Reddy, Managing Director Salary, Perquisites and Commission (Rs.) 26,829,019
The Company does not have any stock option plan or performance linked incentive for the Executive Directors. The appointments are made for a period of five years on the terms and conditions contained in the respective resolutions passed by the Members in the General Meetings. Shares held by Non-Executive Directors The number of equity shares of the Company held by Non-Executive Directors, as on December 31, 2012 is as follows: Name of the Director Mr. N. Radhakrishna Reddy Mr. N. Sujith Kumar Reddy Mr. G. Krishna Prasad Mr. Yogesh Rastogi Mr. E.S. Ravisekar Mr. S L Rao Mr. Dipankar Basu Mr. H L Zutshi c) Shareholders/Investors' Grievance Committee: Composition The Committee consists of the following Directors: Name of the Director Mr.N.Radhakrishna Reddy Mr. N. Jagan Mohan Reddy Mr. N. Sujith Kumar Reddy Terms of Reference The Shareholders/Investors Grievance Committee oversees and reviews all matters connected with the securities transfers and also looks into redressing of shareholders complaints like transfer of shares, non-receipt of annual reports/dividends etc. The Committee oversees the performance of the Registrar and Transfer agents and recommends measures for overall improvement in the quality of investor services. Name and designation of Compliance Officer: Mr. S. Venkat Ramana Reddy, Company Secretary Email-id for Investor Grievances: secretarial@priyacement.com Designation Chairman Member Member No. of Equity Shares (face value of Rs. 2 each) held in the Company 10,383,730 10,028,770 -NIL -NIL -NIL -NIL 140 -NIL -
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Number of Shareholders complaints received so far. During the year ended December 31, 2012, the Company has received and resolved 367 complaints and there were no pending complaints as at the year end. Number of complaints not resolved to the satisfaction of shareholders is Nil. 4. GENERAL BODY MEETINGS: The details of date, location and time of the last three Annual General Meetings held are as under: Financial year ended December, 31 2011 2010 2009 Date April 25, 2012 May 12, 2011 June 7, 2010 Time 11.00 AM 11.00 AM 11.00 AM Venue KLN Prasad Auditorium, FAPCCI, Red Hills, Hyderabad, Andhra Pradesh. KLN Prasad Auditorium, FAPCCI, Red Hills, Hyderabad, Andhra Pradesh. KLN Prasad Auditorium, FAPCCI, Red Hills, Hyderabad, Andhra Pradesh.
Special Resolutions passed during the previous three Annual General Meetings: (i) 37th Annual General Meeting - April 25, 2012 - No special resolutions were passed.
(ii) 36th Annual General Meeting - May 12, 2011 i) ii) Appointment of Mr. N. Jagan Mohan Reddy as Managing Director for a period of 5 years w.e.f. February 10, 2011 (i.e., from February 10, 2011 to February 9, 2016). Commission payable to the Non-Executive Directors per annum shall not exceed 1% of the net profits of the Company.
iii) To Sub-divide the Equity Shares of the Company of the face value of Rs. 10 each into Five Equity Shares of the face value of Rs.2 each. iv) To Substitute the existing Clause V of the Memorandum of Association of the Company consequent to sub-division of Equity Shares of Rs.10 each into Five Equity Shares of Rs. 2 each. v) To Substitute the existing Article No.6 of the Articles of Association of the Company consequent to sub-division of Equity Shares of Rs.10 each into Five Equity Shares of Rs. 2 each.
(iii) 35th Annual General Meeting - June 7, 2010 - No special resolutions were passed. iv) Special resolution passed last year through postal ballot Special Resolution was passed on October 1, 2012 through postal ballot to seek approval of Members to Buyback the equity shares of the Company. The Board had appointed Mr. D.V.M. Gopal,, Practicing Company Secretary as Scrutinizer to conduct the Postal Ballot voting process in a fair and transparent manner. The procedure for Postal Ballot is as per section 192A of the Companies Act, 1956 and Rules made there under Companies (Passing of the Resolution by Postal Ballot) Rules, 2001. The scrutiniser submitted a report to the Chairman stating that the resolution has been duly passed by the members with requisite majority.
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v) Postal ballot: No Special resolution requiring a postal ballot is being proposed for the ensuing Annual General Meeting. 5. DISCLOSURES: a) Related party transactions: During the year ended December 31, 2012, there were no materially significant related party transactions, which had potential conflict with the interests of the Company at large. The transactions with related parties are disclosed in the Note 32 to the Annual Accounts. b) Details of non-compliance etc.: A Statement of Compliance with all Laws and Regulations as certified by the Managing Director and Company Secretary is placed at periodic intervals for review by the Board. There were no instances of non-compliance, penalty or strictures on any matter related to the capital markets, during the last three years. c) Disclosure of Accounting Treatment: The Company has followed the accounting standards notified under Companies (Accounting Standards) Rules, 2006 in the preparation of its financial statements. d) Whistle Blower policy: The Board of Directors of the Company at its meeting held on July 29, 2009 had adopted the Whistle Blower Policy and appointed an ombudsman. Employees can report to the Management concerned unethical behavior, act or suspected fraud or violation of the Company's Code of Conduct policy. The Audit Committee reviews periodically the functioning of whistle blower mechanism. No employee has been denied access to the Audit Committee. A copy of the Whistle Blower Policy is also hosted on the website of the Company:www.raincommodities.com. e) Board Disclosures - Risk Management The Company has a Risk Management Policy which has been adopted by the Board of Directors. Currently, the Company's risk management approach comprises of the following: Governance of Risk Identification of Risk Assessment and control of Risk The risks have been prioritized through a company-wide exercise. Members of Senior Management have undertaken the ownership and are working on mitigating the same through co-ordination among the various departments, insurance coverage, security policy and personal accident coverage for lives of all employees. The Company has appointed a Risk Officer and also put in place the risk management framework, which helps to identify various risks cutting across its business lines. The risks are identified and are discussed by the representatives from various functions.
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Risk Officer will make a presentation periodically on risk management to the Board of Directors and the Audit Committee. The Board and the Audit Committee provides oversight and review the risk management policy periodically. A detailed note on the risks is included in the Management Discussion and Analysis annexed to the Directors' Report. f) Subsidiary Companies The Company has two material unlisted subsidiaries in India. An independent director of the Company is a director on the Board of these subsidiaries. The Audit Committee of the Company reviews the financial statements of the subsidiaries and the minutes of the Board meetings of these subsidiaries are also periodically placed at the Board meeting of the Company. g) Code of Conduct The Board has laid down a Code of Conduct covering the ethical requirements to be complied with covering all the Board members and Senior Management Personnel of the Company. An affirmation of compliance with the code is received from them on an annual basis. h) CEO and CFO Certification The Managing Director and the CFO have given a Certificate to the Board as contemplated in Clause 49 of the Listing Agreement and is separately annexed. i) Proceeds from public issues, rights issues, preferential issues etc. During the year ended December 31, 2012, there were no proceeds from public issues, rights issues, preferential issues etc. j) Details of compliance with mandatory requirements and adoption of the non-mandatory requirements of this clause. The Company has complied with all the mandatory requirements of the Clause 49 of the Listing Agreement. Whistle Blower policy and Remuneration Committee requirements have been adopted from non-mandatory requirements. 6. MEANS OF COMMUNICATION a) Quarterly results The quarterly results of the Company are published in accordance with the requirements of the listing agreement, in widely circulated newspapers like Business Standard (English daily) and Andhra Prabha (Telugu daily). b) News releases, presentations etc. Official news releases along with quarterly results are displayed on the Company's website: www.raincommodities.com During the year ended December 31, 2012, the Company has not made any presentations to the investors/ analysts. c) Management Discussion and Analysis (MDA) Report The report on MDA is annexed to the Directors' Report and forms part of this Annual Report.
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7. GENERAL SHAREHOLDER INFORMATION a) Annual General Meeting : 38th Annual General Meeting Date Time : : April 27, 2013 11:00 a.m. KLN Prasad Auditorium, Federation of Andhra Pradesh Chambers of Commerce & Industry (FAPCCI), Red Hills, Hyderabad-500 004, Andhra Pradesh
Venue :
b)
Financial Calendar : Tentative Schedule for considering Financial Results For the Quarter ending March 31, 2013 For the Quarter ending June 30, 2013 For the Quarter ending September 30, 2013 For the Quarter/Year ending December 31, 2013 : : : : : :
January 1, 2013 to December 31, 2013. April/May, 2013 July/August, 2013 October /November, 2013 January /February, 2014 April 18, 2013 to April 27, 2013 (both days inclusive) On May 10, 2013
c) d) e)
Dates of Book Closures Dividend Payment Date
Listing on Stock Exchanges: Company's equity shares are listed at: Name and Address of the Stock Exchange BSE Limited, Phiroze JeeJeebhoy Towers, Dalal street, Mumbai-400 001. National Stock Exchange of India Limited, Exchange Plaza, Floor 5, Plot # C/1, Bandra-Kurla Complex, Bandra (East), Mumbai - 400051 The Delhi Stock Exchange Limited, DSE House, 3/1 Asaf Ali Road, New Delhi - 110002* Scrip Code 500339
RAINCOM
5019
* The Company has applied to the Delhi Stock Exchange for voluntary delisting of its shares. The listing fees for the year 2012-13 have been paid to the above stock exchanges.
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f) Market Price Data: High and low during each month from January 1, 2012 to December 31, 2012 BSE LIMITED (BSE) Month January, 2012 February, 2012 March, 2012 April, 2012 May, 2012 June, 2012 July, 2012 August, 2012 September, 2012 October, 2012 November, 2012 December, 2012 High (Rs.) 35.30 42.00 39.90 41.50 39.95 38.50 35.90 40.50 41.50 48.30 41.60 40.45 Low (Rs.) 29.25 29.50 37.10 36.10 35.00 33.10 31.30 33.15 36.20 37.50 34.50 36.00 No. of Shares traded 9,36,249 44,56,466 11,32,145 11,36,581 6,65,953 5,44,917 3,21,910 9,73,419 5,62,726 30,13,559 13,20,517 12,20,360
Share Prices at BSE
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NATIONAL STOCK EXCHANGE OF INDIA LIMITED (NSE) Month January, 2012 February, 2012 March, 2012 April, 2012 May, 2012 June, 2012 July, 2012 August, 2012 September, 2012 October, 2012 November, 2012 December, 2012 High (Rs.) 35.25 42.00 39.90 41.95 40.25 38.25 35.85 40.50 41.50 47.95 41.70 43.00 Low (Rs.) 29.30 32.40 37.00 36.10 32.30 33.00 31.00 33.45 35.50 37.35 34.55 36.10 No. of Shares traded 31,93,769 1,67,02,799 59,60,369 24,37,388 14,69,614 17,86,421 15,15,067 23,86,883 17,19,184 80,15,690 34,10,927 35,80,460
Share Prices at NSE
46

g) Performance in comparison to broad based indices such as BSE Sensex:
50.00 45.00 40.00 35.00 30.00 25.00 20.00 Jan- Feb-Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec12 12 12 12 12 12 12 12 12 12 12 12
Price (high) Sensex (Close)
20,000 19,500 19,000 18,500 18,000 17,500 17,000 16,500 16,000
Comparative between the Share price- High and Sensex index close price.
Performance in comparison to broad based indices such as Nifty:

50.00 45.00 40.00 35.00 30.00 25.00 20.00 Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec12 12 12 12 12 12 12 12 12 12 12 12
Price (high) Nifty
6,000 5,750 5,500 5,250 5,000 4,750 4,500
Comparative between the Share price- High and Nifty index close price.
h)
Registrar & Share Transfer Agents: (for Shares held in both Physical and Demat mode) Karvy Computershare Private Limited (Unit: Rain Commodities Limited) Plot No.17 to 24, VittalRao Nagar, Madhapur, Hyderabad - 500 081, Andhra Pradesh. Phone # 91-40-44655189; Fax # 91-40-23420814 / 23420857 Email id: psrchmurthy@karvy.com
i)
Share transfer System and Dematerilisation of Shares: SEBI vide its Circular No. CIR/MIRSD/8 /2012, dated July 5, 2012 has reduced the time-line for registering the transfer of shares to 15 days, the Physical share transfers are processed and the share certificates are returned to the shareholders within a maximum period of 15 days from the date of receipt, subject to the documents being valid and complete in all respects.
47

Any transferee who wishes to demat the shares may approach a Depository participant along with a duly filled Demat Request Form, who shall, on the basis of the Share Certificate, generate a demat request and send the same to the Registrar and Share transfer Agents (RTA). On receipt, the Depository Registrar confirms the request. All requests for Dematerialisation of shares are processed and the confirmation is given to the respective Depositories, i.e., National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL), within 21 days of receipt. j) Distribution of Share holding: Share holding pattern as on December 31, 2012: Sl.No. Category No. of Equity Shares of face value of Rs. 2 each held 150,456,095 51,596,235 162,786 54,222,957 27,800,440 42,548,511 13,001,447 2,050,239 341,838,710 Percentage of shareholding
1. 2. 3.
4. 5. 6. 7. 8. Note:
Promoters / Directors / Associates Mutual Funds and UTI Banks, Financial Institutions, Insurance Companies (Central / State Government Institutions / Non-Government Institutions) FIIs Private Corporate Bodies Indian Public NRIs / OCBs Others (Clearing Members) TOTAL
44.01 15.09 0.05 15.86 8.13 12.46 3.80 0.60 100.00
The Company has extinguished 2,334,185 equity shares till December 31, 2012 which were bought back under Buyback offer. 137,108 equity shares bought back are pending to be extinguished as on December 31, 2012.
NRIs & OCBs 3.80% Indian Public 12.46% Others 0.60 %
Private Corporate Bodies 8.13% Promoters & Associates 44.01%
FIIs 15.86%
Banks 0.05%
Mutual Funds and UTI 15.09%
48

Distribution of Share-holding as on December 31, 2012: Holders No. of shares slab Number of shareholders 42,788 1,582 640 203 71 101 102 181 45,668 % to Total No. of Shareholders 93.69 3.46 1.40 0.44 0.16 0.22 0.22 0.40 100.00 Rs. Amount % to Total paid up capital 7.07 1.77 1.35 0.76 0.38 0.68 1.06 86.93 100.00
1 5,001 10,001 20,001 30,001 40,001 -
5,000 10,000 20,000 30,000 40,000 50,000
48,318,028 12,112,318 9,259,762 5,210,458 2,565,086 4,629,572 7,228,178 594,354,018 683,677,420
50,001 - 1,00,000 1,00,001 and above TOTAL k) Dematerialisation of Shares & Liquidity
The Company's shares are available for dematerialisation with both the Depositories, National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). As on December 31, 2012, 327,284,010 equity shares were dematerialised representing 95.74% of the total paid up equity share capital of the Company. ISIN: INE855B01025 l) Plant Locations: None m) Outstanding GDRs/ADRs/Warrants or any Convertible instruments, conversion date and likely impact on equity. The Company has not issued any GDRs/ADRs and there are no outstanding warrants or any Convertible instruments. n) Address for Correspondence: Company Secretary Rain Commodities Limited Regd. Off: "Rain Center", 34, Srinagar Colony, Hyderabad - 500 073, Andhra Pradesh, India. Phone No.040-40401234, 040-40401259 Fax No. 040-40401214. E-mail: secretarial@priyacement.com (for investor grievance) Website: www.raincommodities.com On behalf of the Board of Directors for RAIN COMMODITIES LIMITED Place : Hyderabad Date : February 20, 2013 N. Jagan Mohan Reddy Managing Director N. Sujith Kumar Reddy Director
49
DECLARATION
As provided under Clause-49 of the Listing Agreement with the Stock Exchanges, the Board of Directors and the Senior Management Personnel have confirmed compliance with the Code of Conduct and Ethics for the financial year ended December 31, 2012. for RAIN COMMODITIES LIMITED Place: Hyderabad Date : February 20 2013 N. Jagan Mohan Reddy MANAGING DIRECTOR
CERTIFICATE OF COMPLIANCE FROM AUDITORS AS STIPULATED UNDER CLAUSE 49 OF LISTING AGREEMENT WITH THE STOCK EXCHANGES IN INDIA
Certificate
To the Members of Rain Commodities Limited We have examined the compliance of conditions of Corporate Governance by Rain Commodities Limited (the Company) for the year ended on December 31, 2012, as stipulated in clause 49 of the Listing Agreement of the Company with stock exchanges in India. The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to a review of the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement. We further state that such compliance is neither an assurance as to the future viability of the company nor of the efficiency or effectiveness with which the management has conducted the affairs of the company.
For Deloitte Haskins & Sells Chartered Accountants (Registration No. 008072S) K. Rajasekhar Partner (Membership No. 23341)
HYDERABAD, February 20, 2013
50
CEO AND CFO CERTIFICATE

We hereby certify that : a) we have reviewed financial statements and the cash flow statement for the Financial Year ended 31st December, 2012 and that to the best of our knowledge and belief: i) ii) b) c) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; these statements together present a true and fair view of the Company's affairs and are in compliance with existing accounting standards, applicable laws and regulations.
There are, to the best of our knowledge and belief no transactions entered into by the Company during the year which are fraudulent, illegal or violative of the Company's code of conduct. We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of internal control systems of the company pertaining to financial reporting and we have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies. We have indicated to the Auditors and the Audit Committee that there are no: i) ii) significant changes in internal control over financial reporting during the year; significant changes in accounting policies during the year requiring disclosure in the notes to the financial statements; and
d)
iii) instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having significant role in the company's internal control system over financial reporting.
For RAIN COMMODITIES LIMITED
Place: Hyderabad Date : 20th February, 2013
N. JAGAN MOHAN REDDY MANAGING DIRECTOR
T. SRINIVASA RAO CHIEF FINANCIAL OFFICER
51
AUDITORS' REPORT
TO THE MEMBERS OF RAIN COMMODITIES LIMITED 1. We have audited the attached Balance Sheet of RAIN COMMODITIES LIMITED ("the Company") as at December 31, 2012, the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditor's Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred to in paragraph 3 above, we report as follows: (a) we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit; (b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books; (c) the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account; (d) in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956; (e) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: (i) in the case of the Balance Sheet, of the state of affairs of the Company as at December 31, 2012;
2.
(ii) in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date and (iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. 5. On the basis of the written representations received from the Directors as on December 31, 2012 taken on record by the Board of Directors, we report that none of the Directors is disqualified as on December 31, 2012 from being appointed as a director in terms of Section 274(1) (g) of the Companies Act, 1956.
3.
4.
For Deloitte Haskins & Sells Chartered Accountants (Registration No. 008072S) K. Rajasekhar Partner (Membership No. 23341) HYDERABAD, February 20, 2013
52
ANNEXURE TO THE AUDITORS' REPORT

(Referred to in paragraph 3 of our report of even date) Having regard to the nature of the Company's business / activities / result, clauses (vi), (viii), (x), (xii), (xiii), (xiv), (xviii), (xix) and (xx) of paragraph 4 of CARO are not applicable to the Company. (i) In respect of its fixed assets: (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets. (b) The Company has a regular programme of verification which provides for physical verification of all the fixed assets once in a period of two years. Accordingly no assets were due for verification during the year. In our opinion, the programme of verification is reasonable. (c) The fixed assets disposed of during the year, in our opinion, do not constitute a substantial part of fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company. (ii) In respect of its inventory: (a) As explained to us, during the year the Company primarily dealt with trading activities. The inventory purchased is sold to its customers on a high sea sale basis and no inventory was held by the Company during the year. (b) Having regard to our comments in paragraph (a) above, clauses 4(ii)(a), 4(ii)(b) and 4(ii)(c) are not applicable. (iii) In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties listed in the Register under Section 301 of the Companies Act, 1956, according to the information and explanations given to us: (a) The Company had granted unsecured loans to three wholly owned subsidiaries amounting to `1,787,723 thousands during the current year. At the year-end, the outstanding balances of loans aggregated `3,012,825 thousands and the maximum amount involved during the year was `3,797,499 thousands. (b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interests of the Company. (c) The receipts of principal amounts and interest have been as per stipulations and there are no overdue amounts. The Company has not taken any loan, secured or unsecured, from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956 and accordingly clauses 4(iii)(e) to 4(iii)(g) of CARO are not applicable. (iv) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any major weakness in such internal control system. (v) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us: (a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered in the Register maintained under the said Section have been so entered. (b) Where each of such transaction is in excess of `5 lakhs in respect of any party, having regard to our comments in paragraph (iv) above, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time. (vi) In our opinion, the internal audit functions carried out during the year by a company appointed by the Management have been commensurate with the size of the Company and the nature of its business. (vii) According to the information and explanations given to us in respect of statutory dues: (a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales
53

tax, Wealth tax, Service tax, Customs duty, Excise duty and other material statutory dues applicable to it with the appropriate authorities. (b) There were no undisputed amounts payable in respect of Income-tax, Service tax, Sales tax, Wealth tax, Customs Duty, Excise Duty and other material statutory dues in arrears as at December 31, 2012 for a period of more than six months from the date they became payable. (c) Details of dues of Income Tax, Sales tax, Wealth tax, Service tax, Custom Duty and Excise Duty which have not been deposited as on December 31, 2012 on account of any disputes are given below : Statue Nature of Dues Forum where Dispute is pending Commissioner of Tax (Appeals) Period to which the amount pertains 2007-2008 Amount involved (` in thousands) 14,217
Income Tax Act, 1961
Income Tax
(viii)In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks. (ix) In our opinion and according to the information and explanations given to us, the terms and conditions of guarantees given by the Company for loans taken by its subsidiaries from banks are not prima facie prejudicial to the interests of the Company. (x) In our opinion and according to the information and explanations given to us, term loans have been applied for the purposes for which they were obtained. (xi) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis have not been used during the year for longterm investment. (xii) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company has been noticed or reported during the year. For Deloitte Haskins & Sells Chartered Accountants (Registration No. 008072S) K. Rajasekhar Partner (Membership No. 23341) HYDERABAD, February 20, 2013
54
BALANCE SHEET AS AT DECEMBER 31, 2012

Note No. A EQUITY AND LIABILITIES 1. Shareholders funds (a) Share capital (b) Reserves and surplus 2. Non-current liabilities (a) Long-term borrowings (b) Deferred tax liabilities (net) (c) Long-term Provisions Current liabilities (a) Short-term borrowings (b) Trade payables (c) Other current liabilities (d) Short-term provisions TOTAL B ASSETS 1 Non-current assets (a) Fixed assets (b) Non-current investments (c) Long-term loans and advances 2. Current assets (a) Trade receivables (b) Cash and Bank balances (c) Short-term loans and advances (d) Other current assets TOTAL Corporate Information Significant Accounting Policies 1 2
All amounts are in Indian Rupees Thousands, except share data and where otherwise stated
As at December 31, 2012
3 4
683,403 2,984,890 3,668,293
698,967 3,050,047 3,749,014 3,195,960 9,309 2,201,816 3,205,269 1,096,518 1,151 51,973 481,632 1,944,765 7,814,874 1,631,274 8,585,557
5 6 7
2,191,092 8,778 1,946
3.
8 9 10 11
332,279 15,331 1,124,574 472,581
12 13 14 15 16 17 18
111,558 3,035,949 2,385,226 344,500 1,100,185 801,877 35,579 2,282,141 7,814,874 5,421,175 3,035,349 2,585,548 1,041,381 866,776 915,144 23,282
118,077 5,620,897
2,846,583 8,585,557
See accompanying notes forming part of the financial statements For and on behalf of the Board of Directors In terms of our report attached for Deloitte Haskins & Sells Chartered Accountants K. Rajasekhar Partner Place: Hyderabad Date : February 20, 2013 N. Jagan Mohan Reddy Managing Director S. Venkat Ramana Reddy Company Secretary N. Sujith Kumar Reddy Director T. Srinivasa Rao Chief Financial Officer
55

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED DECEMBER 31, 2012
Note No.
1. Revenue Revenue from operations Other Income Total revenue 2. Expenses Purchases of stock-in-trade Employee benefits expense Finance costs Depreciation expense Other expenses Total expenses 21 22 23 12 24(a) 680,612 41,258 236,755 5,015 30,920 994,560 642,429 24(b) 78,689 563,740 28 1.65 1 2 0.83 2,380,308 11,902 305,997 5,142 27,855 2,731,204 334,310 39,574 294,736 19 20 690,888 946,101 1,636,989 2,395,445 670,069 3,065,514
For the year ended December 31, 2012
3. 4. 5.
Profit before tax (1-2) Tax expense Profit for the year (3-4) Earnings per share of Rs. 2/- each Basic and Diluted (Rs.)
Corporate Information Significant Accounting Policies
See accompanying notes forming part of the financial statements
For and on behalf of the Board of Directors In terms of our report attached for Deloitte Haskins & Sells Chartered Accountants K. Rajasekhar Partner Place: Hyderabad Date : February 20, 2013 N. Jagan Mohan Reddy Managing Director S. Venkat Ramana Reddy Company Secretary N. Sujith Kumar Reddy Director T. Srinivasa Rao Chief Financial Officer
56
CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2012
For the year ended December 31, 2012 A. Cash flow from operating activities Profit before taxation Adjustments for : Depreciation expense 5,015 Interest income (279,538) Interest and other borrowing costs 146,077 Rental income (228) Liabilities/provisions no longer required written back Dividend income (597,924) Loss on retirement of fixed assets 1,558 Unrealized exchange loss (net) 39,193 Operating loss before working capital changes Adjustments for : Trade receivables 696,881 Loans and advances (49) Trade payables, other current liabilities and provisions (563) Cash generated from operations Income tax paid (net) Net cash flow from/(used in) operating activities B. Cash flow from investing activities Purchase of fixed assets Purchase of long term investments Purchase of current investments Redemption of current investments Loan given to subsidiary companies Loan repaid by subsidiary companies Consideration received on transfer of Cement business (Refer Note (c) below) Loans repaid Refund of share application money Rent received Interest received Dividends received Net cash flow from investing activities 642,429
For the year ended December 31, 2011 334,310 5,142 (215,514) 118,464 (844) (6,500) (426,911) 169,122
(685,847) (43,418) (111,407) 336,628 (216,828) 696,269 652,851 (96,472) 556,379 (54) (600) (1,787,723) 969,520 298,075 600,000 315,000 228 267,363 597,924 1,259,733
(357,041) (22,731)
8,393 (14,338) (159,078) (173,416) (62,500) 62,500 551,925 844 214,734 426,911 1,194,414
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CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2012 (Contd.)
For the year ended December 31, 2012 C. Cash flow from financing activities Proceeds from short term borrowings (net) Finance cost Dividend paid Buy-back of equity shares Net cash flow used in financing activities Net Increase in Cash and cash equivalents (A+B+C) Cash and Cash Equivalents - Opening Balance Cash and Cash equivalents - Closing Balance Notes: a) b) c) (776,858) (151,308) (378,605) (275,932) (1,582,703) 233,409 866,776 1,100,185
For the year ended December 31, 2011 360,926 (113,886) (340,018) (137,653) (230,631) 790,367 76,409 866,776
The above cash flow statement has been prepared under the 'Indirect Method' as set out in the Accounting Standard - 3 on Cash Flow Statements. Cash and cash equivalents includes restricted cash balance of Rs. 31,142 (December 31, 2011 - Rs. 24,759). Pursuant to the Scheme of Arrangement in the financial year 2010 the Cement business was transferred by the Company for a consideration of Rs. 850,000. The consideration receivable was converted into an unsecured loan. During the current year, the Company has received Rs. 298,075 (December 31, 2011: Rs. 551,925) in accordance with the terms of agreement.
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NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Note 1: Corporate Information Rain Commodities Limited (the Company) was incorporated on March 15, 1974 under the Companies Act, 1956. The Company is currently engaged in the business of trading of Petroleum Coke. Note 2: Significant Accounting Policies (a) Basis of accounting and preparation of financial statements The financial statements have been prepared under the historical cost convention on an accrual basis, to comply with the generally accepted accounting principles in India (Indian GAAP), the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. (b) Use of estimates The preparation of the financial statements in conformity with the Indian GAAP requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made. (c) Revenue Recognition Sales are recognized on dispatch of goods and upon transfer of property in the goods to customers. Sales are inclusive of excise duty, as applicable. (d) Other Income Dividend income is recognized when the Companys right to receive dividend is established. Interest income is recognized using the time proportion method, based on the transactional interest rates. (e) Fixed Assets, Depreciation, Impairment Fixed Assets are stated at cost/professional valuation less accumulated depreciation. Cost includes freight, installation cost, duties and taxes, interest on specific borrowings utilized for financing the qualifying fixed assets and other incidental expenses. Depreciation is provided on straight-line method at the rates specified in the Schedule XIV to the Companies Act, 1956 or based on the estimated economic useful lives whichever is higher. Individual assets costing rupees five thousand or below are fully depreciated in the year of acquisition and put to use. All fixed assets are assessed for any indication of impairment at the end of each financial year. On such indication, the impairment loss being the excess of carrying value over the recoverable value of the assets is charged to the Statement of Profit and Loss in the respective financial years. The impairment loss recognized in prior years is reversed in cases where the recoverable value exceeds the carrying value, upon reassessment in the subsequent years. (f) Inventories Traded goods are valued at lower of weighted average cost and net realizable value. Goods in transit are valued at cost or below. (g) Foreign Currency Transactions Transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transactions. Monetary assets and liabilities denominated in foreign currency are restated at the prevailing year end rates. The resultant gain/ loss upon such restatement along with the gain/ loss on account of foreign currency transactions are accounted in the Statement of Profit and Loss. In respect of items covered by forward exchange contracts, the premium or discount arising at the inception of such a forward exchange contract is amortised as expense or income over the life of the contract. Any profit or loss arising on cancellation or renewal of such a forward contract is recognized in the statement of profit and loss.
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(h) Investment Long term investments are carried at cost less provision for diminution, other than temporary, if any, in the value of such investments. Current investments are carried at the lower of cost and fair value. (i) Employee Benefits Defined Contribution Plans Contributions paid/payable under defined contribution plans are recognized in the Statement of Profit and Loss each year. Contribution plans comprises Superannuation covered under a scheme administered and managed by ICICI Prudential Life Insurance Company Limited, and Provident Fund is administered and managed by the Government of India. The Company makes monthly contributions and has no further obligations under the plan beyond its contributions. Defined Benefit Plans The Company has a defined benefit Gratuity plan covering all its employees. Gratuity is covered under a scheme administered by Life Insurance Corporation of India (LIC). The liability as at the balance sheet date is provided based on an actuarial valuation carried out by an independent actuary, in accordance with Accounting Standard 15 on Employee Benefits (AS 15). Other Long Term Employee Benefits Other long term employee benefits comprise compensated absences which is provided based on an actuarial valuation carried out in accordance with AS-15 at the end of the year. (j) Earnings per share The earnings considered in ascertaining the companys Earnings Per Share (EPS) comprise net profit after tax (and includes the post tax effect of any extra ordinary items). The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the year. Dilutive potential equity shares are deemed to be converted as of the beginning of the year, (l) unless they have been issued at a later date. The number of shares used for computing the diluted EPS is the weighted average number of shares outstanding during the year after considering the dilutive potential equity shares. (k) Taxes on Income Current tax is determined based on the amount of tax payable in respect of taxable income for the year. Deferred tax is recognized on timing differences being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods subject to consideration of prudence. Deferred tax assets on unabsorbed depreciation and carry forward of losses are not recognized unless there is a virtual certainty that there will be sufficient future taxable income available to realize such assets. Deferred tax assets and liabilities have been measured using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date. Borrowing Costs Borrowing costs include interest and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction/development of the qualifying asset upto the date of capitalisation of such asset is added to the cost of the assets. (m) Provisions and contingencies A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources wil be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the notes to the financial statements.
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As at December 31, 2012 Number of Amount Shares Note 3: Share capital Authorized: Equity Shares of Rs. 2 each Redeemable preference shares of Rs. 100 each TOTAL Issued, subscribed and paid up Equity Shares of Rs. 2 each TOTAL
As at December 31, 2011 Number of Amount Shares
590,000,000 4,900,000 594,900,000 341,701,602 341,701,602
1,180,000 490,000 1,670,000 683,403 683,403
590,000,000 1,180,000 4,900,000 490,000 594,900,000 1,670,000 349,482,981 349,482,981 698,967 698,967
Notes: (i) Reconciliation of the number of equity shares and amount outstanding at the beginning and at the end of the year Particulars For the year ended December 31, 2012 Number of Amount Shares 349,482,981 7,644,271 341,838,710 137,108 341,701,602 698,967 15,290 683,677 274 683,403 For the year ended December 31, 2011 Number of Amount Shares 354,172,895 3,723,675 350,449,220 966,239 349,482,981 708,346 7,447 700,899 1,932 698,967
As at beginning of the year Less: Equity Shares bought back and extinguished during the year Less: Equity Shares bought back and pending to be extinguished As at end of the year
(ii) Rights, preferences and restrictions attached to the equity shares The Company has only one class of equity shares having a par value of Rs. 2 each per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to number of equity shares held by the shareholders. During the year ended December 31, 2012, the amount of per share dividend recognized as distribution to equity shareholders was Rs. 1.10 (year ended December 31, 2011: Rs. 1.10).
61

(iii) Shareholders holding more than 5% of the equity shares Name of the Shareholder As at December 31, 2012 Number of % Shares 37,766,675 31,634,505 25,316,465 19,935,591 18,150,000 17,673,225 17,404,110 11.05 9.25 7.41 5.83 5.31 5.17 5.09 As at December 31, 2011 Number of % Shares 37,766,675 32,710,205 25,316,465 17,673,225 17,750,000 10.78 9.33 7.22 5.04 5.06
Sujala Investments Private Limited Reliance Capital Trustee Co. Limited (including all managed funds) Focus India Brands Private Limited Merrill Lynch Capital Markets Espana S.A. S.V. HSBC Bank (Mauritius) Limited A/c CIR International Anantha A.L. Reddy Meghamala Enterprises Private Limited ICICI Prudential discovery fund
(iv) Aggregate number of shares issued as fully paid up pursuant to contract without payment being received in cash during the period of five years immediately preceding the reporting date As at December 31, 2012 Number of Shares Equity shares of Rs. 2 each (represents after subdivision of 34,861,286 Equity Shares of Rs. 10 each) allotted to the shareholders of erstwhile Rain Calcining Limited pursuant to the Scheme of Arrangement between the Company and erstwhile Rain Calcining Limited in November, 2007. As at December 31, 2011 Number of Shares
174,306,430
174,306,430
(v) Pursuant to the approval of the shareholders at the Annual General Meeting held on May 12, 2011, each equity share of the Company with a face value of Rs. 10 was sub-divided into five equity shares of Rs. 2 each, with effect from June 16, 2011, being the record date for the said sub-division. (vi) Equity shares bought back (including pending extinguishment) during the last five years: As at December 31, 2012 Number of Shares Aggregate no. of shares [Refer Notes (a), (b) & (c) below] 18,471,293 As at December 31, 2011 Number of Shares 10,689,914
Note: (a) 6,000,000 equity shares of Rs. 2 each fully paid-up (represents after sub-division of 1,200,000 equity shares of Rs. 10 each) were bought back from the shareholders pursuant to buyback of equity shares made during the year ended December 31, 2008. (b) 10,000,000 equity shares of Rs. 2 each fully paid-up were bought back from the shareholders pursuant to buyback of equity shares during the period from November 14, 2011 to March 29, 2012 (Refer Note 25). (c) 2,471,293 equity shares of Rs. 2 each fully paid-up were bought back from the shareholders pursuant to buyback of equity shares during the period from October 22, 2012 to December 31, 2012 (Refer Note 25).
62

As at December 31, 2012 Note 4: Reserves and surplus (a) Capital Reserve (b) Capital redemption reserve Opening balance Add: Transferred from surplus in Statement of Profit and Loss Closing balance (c) Securities premium account Opening balance Less: Utilised towards buy back of equity shares Closing balance (d) General reserve Opening balance Add: Transferred from surplus in Statement of Profit and Loss Closing balance (e) Surplus in Statement of Profit and Loss Opening balance Add: Profit for the year Less: Proposed final dividend (net of dividend on shares bought back) (Refer note 3(ii)) Tax on dividend (net of eligible credit) Transfer to General Reserve Transfer to Capital Redemption Reserve Closing balance TOTAL 371,189 (2,660) 56,374 15,564 1,205,317 2,984,890 1,082,044 563,740 559,801 56,374 616,175 969,098 260,368 708,730 21,379 15,564 36,943 417,725
As at December 31, 2011 417,725 12,000 9,379 21,379
1,097,372 128,274 969,098
530,327 29,474 559,801
1,229,617 294,736 380,242 23,214 29,474 9,379 1,082,044 3,050,047
63

As at December 31, 2012 Note 5: Long-term borrowings Term Loans From Banks - Secured (Refer (i) below) Less: Current portion of Long-term borrowings disclosed under Note 10 - Other current liabilities TOTAL Notes: (i) Term loans are secured by a pari passu: (a) First charge on all immovable and movable properties and 3,286,638 1,095,546 2,191,092
3,195,960 3,195,960
(b) Second charge on all current assets of Rain Cements Limited, a wholly owned subsidiary of the Company. (ii) The term loan of US$ 20 Million carries interest of 3 months Libor plus 300 basis points and is repayable to IDBI as a bullet payment in March 2013 The term loan of US$ 40 Million carries interest of 3 months Libor plus 400 bais points and is repayable to IDBI as below: (a) 64% in 8 equal quarterly installments from April, 2014 to March, 2016 (b) 12% in April, 2016 and (c) 24% in July, 2016 (iii) The term loans availed by the Company have been utilized for the purpose of investment in share capital and extending loan facilities to a subsidiary company, which is engaged in the business of Calcined Petroleum Coke, in accordance with the sanctioned terms. The investment in share capital is in the nature of net investment hedge and has been appropriately dealt with in the consolidated financial statements of the Company (iv) The scheduled maturity of Long-term borrowings and total number of installments are summarised as below: Borrowings Repayable Term Loan from Banks IDBI Bank Ltd. - US$ 20 Million IDBI Bank Ltd. - US$ 40 Million TOTAL 1 10 1,095,546 2,191,092 3,286,638 Number of Instalments As at December 31, 2012
64

As at December 31, 2012 Note 6: Deferred tax liabilities (net) A. Deferred tax liabilities - on account of depreciation Deferred tax assets - on account of employee benefits Deferred tax liabilities [A-B] 9,742 9,742 964 964 8,778
9,309 9,309 9,309
B.
Note 7: Long-term provisions Provision for employee benefits (Refer Note 30) - Compensated absences - Gratuity TOTAL
1,566 380 1,946
Note 8: Short-term borrowings Term loans repayable on demand from banks - Secured [Refer Note (i) & (ii) below] TOTAL
332,279 332,279
1,096,518 1,096,518
Notes: (i) Loans repayable on demand from banks comprise buyer's credit denominated in foreign currency. (ii) Secured by a charge on the current assets of the Company.
Note 9: Trade payables Trade payables - other than Micro and Small enterprises TOTAL Note:
15,331 15,331
1,151 1,151
There are no Micro and Small Enterprises to whom the Company owes dues which are outstanding for more than 45 days as at December 31, 2012 in accordance with the contractual obligations. The information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.
65

As at December 31, 2012 Note 10: Other current liabilities Current maturities of long-term debt (Refer Note below) Interest accrued but not due on borrowings Unpaid dividends Other payables - Statutory remittances - Rain Commodities (USA) Inc. - Others TOTAL Notes: Refer Note 5(i) - Long-term borrowings for details of security 1,128 34 1,124,574 1,095,546 2,220 25,646
7,451 20,006
24,515 1 51,973
Note 11: Short Term Provisions Provision for employee benefits - Compensated absences Provision - Others: - Provision for tax [net of advance tax Rs. 286,647 (December 31, 2011 Rs. 286,647)] - Provision for Dividend - Provision for tax on dividend 38,237 372,836 60,483 472,581 38,237 380,242 63,153 481,632 1,025 -
66
Note 12: Fixed Assets Gross Block (At Cost/ Professional Valuation) As at Up to December December 31, 2012 31, 2011 For the year 82,771 8,488 16,180 4,843 29,511 24,369 45,234 16,443 144,448 147,588 1,349 2,867 799 5,015 5,142 Depreciation On Deletions Upto December 31, 2012 661 975 1,636 9,837 18,386 4,667 32,890 29,511 Net Block As at As at December December 31, 2012 31, 2011 72,934 26,848 11,776 111,558 74,283 30,164 13,630 118,077
Description
As at Additions Deletions December during during 31, 2011 the year the year 82,771 46,344 18,473 147,588 147,588 54 3,194 54 2,084 1,110 -
67
Buildings
Furniture and Fixtures
Office Equipments
TOTAL
Year ended December 31, 2011

As at December 31, 2012 Note 13: Non-current investments Investment in subsidiaries (unquoted) (a) Rain Cements Limited 29,805,000 (December 31, 2011 : 29,805,000) Equity Shares of Rs. 10 each fully paid up (b) Rain Commodities (USA) Inc. 20 (December 31, 2011 : 20) Common Stock at face value of US$ 0.01 per share fully paid up 20,000,000 (December 31, 2011 : 20,000,000) Class B Redeemable Common stock of face value US$ 1 per share fully paid up (c) Rain Coke Limited 60,000 (December 31, 2011 : Nil) Equity Shares of Rs. 10 each fully paid up TOTAL Note 14: Long-term loans and advances (a) Loans and advances to related parties Unsecured, considered good - Subsidiary Companies - Rain Commodities (USA) Inc. * - Rain Cements Limited ** - Rain CII Carbon (Vizag) Limited *** (b) Advance income tax [net of provision for tax Rs 722,691 (December 31, 2011 Rs. 631,789)] (c) Security deposit TOTAL Notes: 2,128,104
2,128,104
4,445 902,800 600 3,035,949
4,445 902,800 3,035,349
2,191,092 20,000 2,211,092 174,085 49 2,385,226
2,130,640 298,075 2,428,715 156,833 2,585,548
Disclosure as per Clause 32 of the Listing Agreement, with Stock Exchanges * Maximum amount outstanding during the year Rs. 2,313,323 (December 31, 2011 : Rs. 2,130,640) ** Maximum amount outstanding during the year Rs. 1,052,958 (December 31, 2011 : Rs. 1,186,774) *** Maximum amount outstanding during the year Rs. 431,218 (December 31, 2011: Rs. Nil) Note 15: Trade receivables Trade receivables outstanding for a period exceeding six months from the date they were due for payment - Unsecured, considered good Other Trade receivables - Unsecured, considered good TOTAL
344,500 344,500
440,921 600,460 1,041,381
68

As at December 31, 2012 Note 16: Cash and Bank balances Cash and cash equivalents Balances with banks - in current accounts - in deposit accounts Other Bank balances: - Balances held as margin money against guarantees and other commitments - Unpaid dividend accounts TOTAL
220,689 848,354
196,564 645,453
5,496 25,646 1,100,185
4,753 20,006 866,776
Note 17: Short-term loans and advances (Unsecured, considered good) Loans and advances to related parties - Subsidiary Companies (Refer Note 14) - Rain Cements Limited - Rain CII Carbon (Vizag) Limited Prepaid expenses Loans to others Advance towards share application money TOTAL
561,733 240,000 144 801,877
144 600,000 315,000 915,144
Note 18: Other current assets Accruals - Interest accrued on deposits - Interest accrued on Loans TOTAL
8,993 26,586 35,579
15,392 7,890 23,282
69

For the year ended December 31, 2012 Note 19: Revenue from operations Sale of traded goods Petroleum Coke TOTAL Note 20: Other income Interest income - Interest from banks on: - deposits - other balances - Interest on loans Dividend income: - from current investments (others) - from long-term investments (subsidiaries) Gain on foreign currency transactions and translations Rental income from operating leases Liabilities / provisions no longer required written back TOTAL
690,888 690,888
2,395,445 2,395,445
87,359 713 191,466 597,924 68,411 228 946,101
27,226 3,503 184,785 496 426,415 20,300 844 6,500 670,069
Note 21 Purchases of stock-in-trade Petroleum Coke TOTAL 680,612 680,612 2,380,308 2,380,308
Note 22: Employee benefits expense Salaries and wages Contributions to provident and other funds Staff welfare expenses TOTAL 35,900 5,350 8 41,258 11,833 69 11,902
Note 23: Finance costs Interest expense on borrowings Other borrowing costs Net loss on foreign currency transactions and translations TOTAL 137,654 8,423 90,678 236,755 112,348 6,116 187,533 305,997
70

For the year ended December 31, 2012 Note 24 (a): Other expenses Repairs and maintenance - Others Rent Insurance Rates and taxes Communication expenses Travelling and conveyance Advertisement Legal and professional charges Payments to auditors [Refer Note below] Loss on retirement of fixed assets Directors sitting fee Commission to directors Printing and Stationery Miscellaneous expenses TOTAL Note: Payment to Auditors comprises (excluding Service Tax): As auditors - Statutory Audit Limited Review Fee Other Services Reimbursement of Expenses TOTAL 320 300 156 3,311 1,405 288 2,273 3,870 1,635 1,558 920 12,500 1,107 1,277 30,920
For the year ended December 31, 2011 67 11 16,051 1,948 80 2,301 3,289 1,709 735 1,055 609 27,855
900 450 275 10 1,635
900 450 350 9 1,709
Note 24(b): Tax expenses Current Tax (i) Current tax for current year (ii) Current tax credit relating to earlier years Net current tax Deferred Tax
87,118 (7,898) 79,220 (531) 78,689
43,649 43,649 (4,075) 39,574
71

25. Buy-back of Equity Shares The Board of Directors of the Company, during their meeting held on October 25, 2011, approved the buyback of 10,000,000 equity shares of Rs.2/- each at maximum price of Rs.41/- per share for an amount not exceeding Rs. 350,000. The board decided to implement the buyback offer through the open market purchases in the stock exchanges. Pursuant to the offer, the Company commenced the buyback on November 14, 2011. During the year ended December 31, 2011, the Company has bought back 4,689,914 equity shares of Rs.2/- each aggregating Rs. 137,653 and extinguished 3,723,675 equity shares upto December 31, 2011 and the balance 966,239 equity shares were extinguished subsequent to the year end. The Company bought back and extinguished the balance 5,310,086 equity shares of Rs.2/- each aggregating Rs. 182,255 during the current financial year. Further to the completion of the scheme of buyback approved by the board of directors on October 25, 2011, the Shareholders of the Company have approved another scheme for buyback of equity shares of Rs. 2/- each vide postal ballot on October 1, 2012 through open market transactions at a price not exceeding Rs.46/- per share for an amount not exceeding Rs. 460,000. The Company commenced the buyback of equity shares on October 22, 2012 and bought back 2,471,293 equity shares of Rs.2/- each aggregating Rs. 93,677 and extinguished 2,334,185 equity shares upto December 31, 2012 and the balance 137,108 equity shares were extinguished subsequent to the year end. Accordingly, Rs. 15,564 (December 31, 2011: 9,379) has been reduced from paid-up equity share capital and in accordance with the provisions of Section 77A of the Companies Act, 1956, Rs. 260,368 (December 31, 2011: 128,274) has been utilized from securities premium account and Rs. 15,564 (December 31, 2011: 9,379) transferred to the capital redemption reserve from surplus in statement of profit and loss. 26. Contingent liabilities not provided for in respect of: December 31, 2012 Amount Matters under dispute - Income Tax Corporate Guarantee issued on behalf of wholly owned subsidiaries : - Rain Commodities USA Inc., US$ 100 million (December 31, 2011: US$ 125 million) equivalent to 25,615 December 31, 2011 Amount 85,362
5,477,730
6,658,250
72

27. (a) There are no outstanding forward exchange contracts as at the year end. (b) The year end receivable and payables in foreign currency which are not covered by forward contracts / derivative contracts are as follows: As at December 31, 2012 Foreign Amount Currency (In Millions) As at December 31, 2011 Foreign Amount Currency (In Millions)
Currency (i) Short term Borrowing (including interest thereon) Trade Payables Trade Receivables Term Loans Loans & Advances Given
(ii) (iii) (iv) (v)
US$ US$ US$ US$ US$
6.11 0.04 60.00 40.00
334,499 1,942 3,286,638 2,191,092
20.73 0.46 60.00 40.00
1,103,969 24,515 3,195,960 2,130,640
28. Earnings Per Share (EPS) Year ended December 31, 2012 a. b. Profit After Tax Weighted average number of equity shares of Rs.2/- each outstanding during the year (Nos.) (Refer Note below) Earnings Per Share c. Basic and Diluted - [a/b] - (Rs.) 563,740 345,528,163 Year ended December 31, 2011 294,736 354,009,317
1.65
0.83
Note: During the previous year 2011, equity shares of the Company with a face value of Rs.10/- each was sub-divided into 5 equity shares of Rs.2/- each. 29. The Company has entered into operating lease agreements for vehicles. The lease rentals of Rs. 300 (December 31, 2011 - Rs. Nil) were charged off in the Statement of Profit and Loss. These agreements are cancellable in nature. 30. Employee Benefits a) Defined Contribution Plans The Company has recognized the following amounts in Note 22 of the Statement of Profit and Loss: Particulars Provident Fund Superannuation Fund TOTAL Year ended December 31, 2012 Amount 2,098 67 2,165 Year ended December 31, 2011 Amount -
73

b)
Defined Benefit Plans - Gratuity The following table sets forth the status of the Gratuity plan of the Company and the amounts recognized in the Balance Sheet and Statement of Profit and Loss: Year ended December 31, 2012 Amount Present value of funded obligation Less: Fair Value of Plan Assets Net Liability - Current - Non current 3,221 (2,841) 380 Year ended December 31, 2011 Amount -
Amounts recognized in Note 22 of Statement of Profit and Loss is as follows: Year ended December 31, 2012 Amount Current service cost Past service cost (Due to transfer of employees from subsidiaries) Interest cost Expected return on plan assets Net actuarial loss TOTAL 219 2,738 190 18 3,165 Year ended December 31, 2011 Amount -
Reconciliation of opening and closing balances of the present value of obligations: Year ended December 31, 2012 Amount Opening defined benefit obligation Current service cost Past service cost (Due to transfer of employees from subsidiaries) Interest cost Actuarial loss Benefits paid Closing defined benefit obligation 219 2,738 190 74 3,221 Year ended December 31, 2011 Amount -
74

Reconciliation of opening and closing balances of the fair value of plan assets: Year ended December 31, 2012 Amount Opening fair value of plan assets Expected return on plan assets Actuarial gain Contribution by employer Benefits paid Closing fair value of plan assets Actual return on plan assets Major category of plan assets as a percentage to fair value of plan assets. Year ended December 31, 2012 Amount Insurer Managed Funds Experience adjustments 100% Year ended December 31, 2012 Amount 3,221 2,841 (380) (15) 56 Year ended December 31, 2011 Amount Year ended December 31, 2011 Amount 56 2,785 2,841 56 Year ended December 31, 2011 Amount -
Defined benefit obligations Plan assets Deficit Experience adjustment on plan liabilities Experience adjustment on plan assets Principal actuarial assumptions used:
Year ended December 31, 2012 Discount rates Expected rate of return on plan assets Expected salary increase rates 8.20% 8.00% 6.00%
Year ended December 31, 2011 -
The estimates of future salary increase considered in the actuarial valuation take into account factors like inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. The expected return on plan assets is based on actuarial expectation of the average long term rate of return expected on investments of the funds during the estimated term of the obligations.
75

c)
Defined Benefit Plans - Compensated absences The following table sets forth the status of the compensated absences: Year ended December 31, 2012 Amount Net Liability - Current - Non current TOTAL Amounts recognized in Note 22 of Statement of Profit and Loss 1,025 1,566 2,591 2,640 Year ended December 31, 2011 Amount -
The principal actuarial assumptions used for the computation of defined plan are also used for the computation of compensated absence of long term benefit. 31. Additional information to the financial statements: (a) Particulars of revenue Year ended December 31, 2012 Amount Petroleum Coke TOTAL (b) Details of purchases of stock-in-trade Year ended December 31, 2012 Amount Petroleum Coke TOTAL (c) CIF value of imports Year ended December 31, 2012 Amount Petroleum Coke TOTAL 680,612 680,612 Year ended December 31, 2011 Amount 2,380,308 2,380,308 680,612 680,612 Year ended December 31, 2011 Amount 2,380,308 2,380,308 690,888 690,888 Year ended December 31, 2011 Amount 2,395,445 2,395,445
76

(d) Expenditure in foreign currency Year ended December 31, 2012 Amount Interest on term loans Interest on buyer's credit Legal and professional charges Rates and taxes (e) Earnings in foreign currency Year ended December 31, 2012 Amount Interest on loans Dividend from subsidiary company (f) Dividends remitted in foreign currency to non-resident shareholders Year ended December 31, 2012 Amount Number of shareholders Number of shares held (face value of Rs.2/- each) Year to which dividend relates Amount of dividend remitted 32. Related Party Disclosures a) (i) Names of related parties and description of relationship: Subsidiaries a) b) c) d) e) f) g) h) i) Rain Cements Limited (RCL) Rain Commodities (USA) Inc (RCUSA) Moonglow Company Business Inc, BVI (Moonglow) [Subsidiary of RCL] Renuka Cement Limited (RenCL) [Subsidiary of RCL] Rain Global Services LLC (RGS) (Subsidiary of RCUSA) Rain Global Services Egypt Ltd (RGSE) [Subsidiary of RGS] Rain Carbon USA, LLC (RCUSA1) [Subsidiary of RCUSA] Carbon Holdings USA, LLC (CHUSA) [Subsidiary of RCUSA1] CPC Holdings USA, LLC (CPCUSA) [Subsidiary of CHUSA] 399 2,970,055 2011 3,267 Year ended December 31, 2011 Amount 416 2,622,522 2010 12,063 103,980 219,400 Year ended December 31, 2011 Amount 86,796 187,975 135,271 2,220 Year ended December 31, 2011 Amount 112,348 48,755 734 13,247
77

Related Party Disclosures (Contd.) a) (i) Names of related parties and description of relationship: Subsidiaries (Contd.) j) k) l) m) n) o) p) q) r) s) (ii) Enterprise where key managerial personnel along with their relatives exercise significant influence a) b) c) d) e) f) g) h) (iii) Key Management Personnel a) b) Rain CII Carbon (Vizag) Limited (RCCVL) [Subsidiary of CPCUSA] Rain CII Carbon LLC (RCC) [Subsidiary of CPCUSA] CII Carbon Corp. (CII) [Subsidiary of RCC] Rain CII Carbon Mauritius Limited (RCCM) [Subsidiary of RCC] Zhenjiang Xin Tian Tansu Co. Ltd., (ZXXTCL) [Subsidiary of RCCM] Rain Coke Limited [Subsidiary of RCOL] from March 19, 2012 Rain CTP Inc. (Rain CTP) [Subsidiary of RCC] from October 15, 2012 Rain Escrow Corp [Subsidiary of RCC] from December 3, 2012 9274 5520 Quebec Inc [Subsidiary of Rain CTP] from December 14, 2012 Rain (0952853) Holdings Ltd [Subsidiary of Rain CTP] from December 28, 2012 Sujala Investments Private Limited Focus India Brands Private Limited Nivee Holdings Limited Arunachala Holdings Limited PCL Financial Services Limited Rain Entertainment Private Limited Nivee Property Developers Private Limited Pragnya Priya Foundation from January 25, 2012 Mr. N. Radha Krishna Reddy Chairman Mr. N. Jagan Mohan Reddy Managing Director with effect from February 10, 2011 Mr. N. Sujith Kumar Reddy Executive Director upto February 10, 2011
c)
78

b)
Transactions with related parties: Year Ended December 31, 2012

Nature of Transactions Subsidiary Companies Enterprises where Key Key Managerial Management Personnel along with Personnel their relatives exercise significant influence Balance outstanding To/(From)
Sales / Receivables RCL - (GPC) 344,500 RCCVL - (GPC) 346,388 Purchases / Payables RGS (GPC) 680,612 Loan given RCUSA 51,060 RCL 1,305,445 RCCVL 431,218 Loan repaid RCL 1,041,787 RCUSA 54,590 RCCVL 171,218 Rent received RCCVL 228 Interest Income RCUSA 103,980 RCL 76,377 RCCVL 5,262 Managerial Remuneration - N. Jagan Mohan Reddy Dividend Paid Dividend Income received RCUSA 219,400 RCL 378,524 Freight and Other Expenses reimbursed RGS 55,640 RCCVL 1,725 Interest and Finance Charges recovered RCCVL 52,410 Reimbursement of Payment made on behalf of RCCVL 8,672 Investment in Subsidiary Rain Coke 600 Corporate Guarantee (released) / given on behalf of RCUSA (1,369,433) Corporate Guarantee (released) / given on behalf of the Company by RCL (991,000)
89,742 -
26,829 31,899 -
(344,500) (2,213,035) (561,733) (264,643) 12,500
600
5,477,730
3,286,638
79

b)
Transactions with related parties: Year Ended December 31, 2011

Nature of Transactions Subsidiary Companies Enterprises where Key Key Managerial Management Personnel along with Personnel their relatives exercise significant influence Balance outstanding To/(From)
Sales / Receivables RCCVL - (GPC) Purchases / Payables RCC (GPC) RGS (GPC) RCUSA Loan given RCUSA RCL Loan repaid RCL Rent received RCCVL Interest Income RCUSA RCL Managerial Remuneration - N. Jagan Mohan Reddy - N. Sujith Kumar Reddy Freight and Other Expenses RGS RCC Corporate Guarantee given on behalf of RCUSA Dividend Paid Dividend Income received RCUSA RCL Interest and finance Charges recovered RCCVL Reimbursement of Payment made on behalf of RCL Corporate Guarantee given on behalf of the Company by - RCL
2,395,445 1,049,639 427,087 551,925 760 86,796 37,922 162,454 238,126
10,478 873 -
(1,041,381) 24,515 (2,130,640) (298,075) -
2,663,300 187,975 238,440
75,057 -
26,679 -
6,658,250 -
48,755
336,774
4,186,960
4,186,960
80

33.
Segment Reporting The segment results are included and presented on consolidated basis in accordance with the requirements of Accounting Standard - 17 "Segment Reporting".
34.
The Revised Schedule VI has become effective for the periods beginning on or after April 1, 2011 for the presentation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped/ reclassified wherever necessary to correspond with the current year's classification/ disclosure.
For and on behalf of the Board of Directors N. Jagan Mohan Reddy Managing Director Place: Hyderabad Date : February 20, 2013 S. Venkat Ramana Reddy Company Secretary N. Sujith Kumar Reddy Director T. Srinivasa Rao Chief Financial Officer
81
Operational Performance of Subsidiary Companies
The Ministry of Corporate Affairs, Government of India, vide Circular No.51/12/2007-CL-III, dated February 8, 2011 and Circular No.5/12/2007-CL-III, dated February 21, 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements. Rs. in thousands Reporting Currency Capital Reserves Total Assets Total Investments Liabilities (Refer Note 4 below) Total Revenue Profit Before Taxation Provision for Taxation Profit After Taxation Proposed Dividend

298,050 6,579,901 6,265,249 1,260,505 3,902,180 1,455,372 8,896,752 1,611,148 8,896,757 1,611,116 8,896,687 1,608,906 8,004,952 14,450,937 81,800 2,591,134 248 49,558 54,780 135,051 23,340 (764) 11,189,958 11,605,857 5,357,563 10,507,900 10,507,873 10,507,839 89,810,619 7,504,340 992,299 849,781 158,507 11,189,958 11,605,857 5,357,563 10,507,900 10,507,873 10,507,839 89,810,619 7,504,340 992,299 849,781 158,507 16,130 9,129,123 853,875 457,856 457,856 457,856 - 28,297,764 - 12,733,935 - 5,111,856 - 1,272,212 789,649 652,655 (11) 457,856 457,848 455,633 3,977,401 1,571,095 14,762 104,539 (992) 378,560 (6,548) 1,185,151 544,368 411,087 659,203 (11) 457,856 457,848 455,633 2,792,250 1,026,727 14,762 104,539 (992) 439,929 216,560 457,856 457,856 457,856 457,856 INR USD USD USD USD USD USD INR USD USD USD USD RMB Yuan INR INR USD USD USD USD 140,525 5,007 600 (7,048) (3,735) (198) 179,385 3,656 412 179,385 3,656 412 122,257 12,773 (2,370) (198) 12,773 (2,370) (198) For and on behalf of the Board of Directors N. Jagan Mohan Reddy Managing Director N. Sujith Kumar Reddy Director T. Srinivasa Rao Chief Financial Officer S. Venkat Ramana Reddy Company Secretary
S. Name of the Subsidiary No. Company
82
1 2 3 4 5 6 7 8 9 10 11 12 13
14 15 16 17 18 19
Rain Cements Limited Rain Commodities (USA) Inc. Moonglow Company Business Inc. Rain Carbon USA, LLC Carbon Holdings USA, LLC CPC Holdings USA, LLC Rain CII Carbon LLC Rain CII Carbon (Vizag) Limited Rain Global Services LLC RGS Egypt Limited Rain CII Carbon Mauritius Limited CII Carbon Corporation Zhenjiang Xin Tian Tansu Company Limited Renuka Cement Limited Rain Coke Limited* Rain CTP Inc.* Rain Escrow Corp* Rain (0952853) Holdings Ltd* 9274 5520 Quebec Inc.*
* Companies incorporated during the current financial year
Notes: 1.
Exchange rates considered as on December 31, 2012: 1US$ = Rs. 54.78 and 1RMB Yuan = Rs. 8.80.
2.
Refer Note 2(a) of Consolidated Financial Statements to see relation with the subsidiary, percentage equity holding and Country of incorporation for each of subsidiary.
3.
Financial Information is based on Audited Results of the subsidiaries.
4.
Investments except in case of Investments in subsidiaries.
Place : Hyderabad Date : March 21, 2013
CONSOLIDATED FINANCIAL STATEMENTS
83
AUDITORS' REPORT
TO THE BOARD OF DIRECTORS OF RAIN COMMODITIES LIMITED 1. We have audited the attached Consolidated Balance Sheet of RAIN COMMODITIES LIMITED ("the Company") and its subsidiaries (the Company and its subsidiaries constitute "the Group") as at December 31, 2012, the Statement of Consolidated Profit and Loss and the Consolidated Cash Flow Statement of the Group for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Company's Management and have been prepared on the basis of the separate financial statements and other information regarding components. Our responsibility is to express an opinion on these Consolidated Financial Statements based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We did not audit the financial statements of certain subsidiaries, whose financial statements reflect total assets of `91,668,541 thousands as at December 31, 2012, total revenues of `32,640,975 thousands and net cash inflows amounting to ` 39,709,616 thousands for the year ended on that date as considered in the Consolidated Financial Statements. These financial statements and other financial information have been audited by other auditors whose reports have been furnished to us and our opinion in so far as it relates to the amounts included in respect of these subsidiaries is based solely on the reports of the other auditors. 4. We report that the Consolidated Financial Statements have been prepared by the Company in accordance with the requirements of Accounting Standard 21 (Consolidated Financial Statements) as notified under the Companies (Accounting Standards) Rules, 2006. Based on our audit and on consideration of the separate audit reports on the individual financial statements of the Company and its aforesaid subsidiaries, to the best of our information and according to the explanations given to us, in our opinion, the Consolidated Financial Statements give a true and fair view in conformity with the accounting principles generally accepted in India: (i) in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at December 31, 2012;
5.
2.
(ii) in the case of the Statement of Consolidated Profit and Loss, of the profit of the Group for the year ended on that date and (iii) in the case of the Consolidated Cash Flow Statement, of the cash flows of the Group for the year ended on that date. For Deloitte Haskins & Sells Chartered Accountants (Registration No.: 008072S) K. Rajasekhar Partner (Membership No. 23341) HYDERABAD, February 20, 2013
3.
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CONSOLIDATED BALANCE SHEET AS AT DECEMBER 31, 2012

Note No. A. EQUITY AND LIABILITIES 1. Shareholders' funds (a) Share capital (b) Reserves and surplus 2. 3. Minority interest Non current liabilities (a) Long-term borrowings (b) Deferred tax liabilities (net) (c) Other long-term liabilities (d) Long-term provisions Current liabilities (a) Short-term borrowings (b) Trade payables (c) Other current liabilities (d) Short-term provisions TOTAL B. ASSETS 1. Non-current assets (a) Fixed assets (i) Tangible assets (ii) Intangible assets (iii) Capital work-in-progress (b) Non-current investments (c) Long-term loans and advances (d) Other non-current assets 2. Current assets (a) Inventories (b) Trade receivables (c) Cash and bank balances (d) Short-term loans and advances (e) Other current assets
3 4
683,403 24,833,260 25,516,663 120,522
698,967 20,509,989 21,208,956 66,519 31,518,157 2,540,037 366,371 561,568 66,672,171 34,986,133 4,624,667 4,123,133 2,668,914 475,103 15,242,187 107,551,543 11,891,817 68,153,425
5 6 7 8 9 10 11 12
61,756,126 4,118,247 560,065 237,733 882,105 6,021,109 7,864,254 474,719
4.
13 13,767,569 23,426,317 5,865,782 14 15 16 17 18 19 20 21 16,130 1,131,907 7,396 1,155,433 9,849,554 5,649,162 46,657,104 1,045,289 135,333 63,336,442 107,551,543 10,969,937 6,923,574 8,293,954 2,613,942 238,982 29,040,389 68,153,425 16,125 909,238 5,856 931,219 14,128,306 22,812,232 1,241,279
TOTAL Corporate information 1 Significant accounting policies 2 See accompanying notes forming part of the consolidated financial statements In terms of our report attached for Deloitte Haskins & Sells Chartered Accountants K. Rajasekhar Partner Place: Hyderabad Date : February 20, 2013
For and on behalf of the Board of Directors N. Jagan Mohan Reddy Managing Director S. Venkat Ramana Reddy Company Secretary N. Sujith Kumar Reddy Director T. Srinivasa Rao Chief Financial Officer
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STATEMENT OF CONSOLIDATED PROFIT AND LOSS FOR THE YEAR ENDED DECEMBER 31, 2012
Note No.
1. Revenue Revenue from operations (Gross) Less: Excise duty Revenue from operations (Net) Other income Total revenue 2. Expenses Cost of materials consumed Purchases of stock-in-trade Changes in inventories of finished goods, work-in-progress and stock-in-trade Employee benefits expense Finance costs Depreciation and amortisation expense Other expenses Total expenses 3. 4. 5. 6. 7. Profit before tax and minority interest (1-2) Tax expense Profit after tax and before minority interest (3-4) Minority interest Profit for the year (5-6) Earnings per share of Rs. 2/- each Basic and Diluted (Rs.) Corporate information Significant accounting policies 29.7 1 2 13.25 18.76 28 24 25 26 13 27 23,083,413 4,325,620 933,199 2,397,688 3,727,632 1,199,682 11,784,289 47,451,523 6,828,355 2,180,220 4,648,135 70,647 4,577,488 27,180,838 4,842,497 (1,706,826) 1,939,048 2,455,560 1,129,391 10,702,610 46,543,118 10,072,613 3,425,533 6,647,080 5,832 6,641,248 23 22 55,722,858 2,108,373 53,614,485 665,393 54,279,878 58,261,204 1,866,054 56,395,150 220,581 56,615,731
See accompanying notes forming part of the consolidated financial statements
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CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2012
For the year ended December 31, 2012 A. Cash flow from operating activities Profit before taxation Adjustments for : Depreciation and amortisation expense Loss on sale/retirement of fixed assets Interest and other borrowing costs Interest income Dividend from current investments Liabilities/provisions no longer required written back Provision for doubtful trade receivables (net of reversals) Net unrealized foreign exchange loss Operating profit before working capital changes Adjustments for : Adjustments for (increase)/decrease in operating assets: Inventories Trade receivables Loans and advances and Other assets Trade payables, Other liabilities and Provisions Cash generated from operations Income tax paid Net cash from operating activities B. Cash flow from investing activities Capital expenditure on fixed assets, including capital advances Proceeds from sale of fixed assets Purchase of other long-term investments Purchase of current investments Redemption of current investments Loans repaid Refund of share application money Interest received Dividends received on current investments Net cash used in investing activities 6,828,355 1,199,682 5,158 3,665,572 (388,661) (54) (165,628) 23,991 517,609 4,857,669 11,686,024
For the year ended December 31, 2011 10,072,613 1,129,391 4,159 2,318,995 (173,584) (2,839) (31,092) (141) 1,267,949 4,512,838 14,585,451
1,120,383 1,249,022 197,173 1,082,975 3,649,553 15,335,577 (819,410) 14,516,167
(3,517,533) (1,505,001) (206,401) 2,152,215 (3,076,720) 11,508,731 (3,102,100) 8,406,631
(5,284,141) 13,953 (5) 600,000 315,000 408,975 54 (3,946,164)
(1,449,823) 20,230 (28) (270,000) 270,000 142,646 2,839 (1,284,136)
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CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2012
For the year ended December 31, 2012 C.
Cash flow from financing activities Proceeds from long-term borrowings 37,101,618 1,365,614 Repayment of long-term borrowings (2,311,806) (2,403,893) Net increase/(decrease) in working capital borrowings (3,784,502) 1,090,955 Sales tax deferment (paid) / availed (12,695) 95,686 Interest and other borrowing costs (2,478,597) (2,132,666) Dividend paid (440,010) (378,698) Buy-back of equity shares (275,932) (137,653) Net cash from / (used in) financing activities 27,798,076 (2,500,655) Net Increase in Cash and Cash Equivalents (A+B+C) 38,368,079 4,621,840 Cash and Cash Equivalents - Opening Balance 8,293,954 3,638,587 Cash and Cash Equivalents on acquisition of subsidiary (Refer Note (iii) below) 3 Effect of exchange differences on restatement of foreign currency cash and cash equivalents (4,929) 33,524 Cash and Cash equivalents - Closing Balance (Refer Note (ii) below) 46,657,104 8,293,954 Notes: (i) The above cash flow statement has been prepared under the 'Indirect Method' as set out in the Accounting Standard-3 on Cash Flow Statements. (ii) Reconciliation of Cash and Cash Equivalents with the Balance Sheet (Refer Note 19) Cash and Cash Equivalents (a) Cash on hand 672 916 (b) Cheques, drafts on hand 28,170 26,476 (c) Balances with banks (i) In current accounts 2,747,302 4,327,138 (ii) In EEFC accounts 7,845 474,581 (iii) In deposit accounts 5,281,418 8,036,565 3,017,984 7,819,703 Other bank balances (i) Margin money accounts 73,931 431,697 (ii) Unpaid dividend accounts 25,646 20,006 (iii) In escrow accounts 38,498,646 Less: Non-current bank balances (6,526) 38,591,697 (4,844) 446,859 46,657,104 8,293,954 (iii) Cash and cash equivalents of previous year include Rs. 3 of Renuka Cement Limited taken over consequent to it becoming a subsidiary. (iv) Comparative figures of the previous year, where necessary, have been regrouped to conform to those of the current year. For and on behalf of the Board of Directors In terms of our report attached for Deloitte Haskins & Sells Chartered Accountants K. Rajasekhar Partner Place: Hyderabad Date : February 20, 2013 N. Jagan Mohan Reddy Managing Director S. Venkat Ramana Reddy Company Secretary N. Sujith Kumar Reddy Director T. Srinivasa Rao Chief Financial Officer
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NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1: Corporate Information Rain Commodities Limited (the Company) was incorporated on March 15, 1974 under the Companies Act, 1956. The Company along with its subsidiaries (the Group or Rain Group) is engaged in the business of manufacture and sale of Calcined Petroleum Coke (CPC), Cement, generation and distribution of Energy (steam and electricity) through waste heat recovery and trading in Petroleum Coke (Pet Coke). Note 2: Significant Accounting Policies (a) Basis of preparation of Consolidated Financial Statements The financial statements have been prepared under the historical cost convention on an accrual basis, to comply with the generally accepted accounting principles in India (Indian GAAP), the Accounting Standards notified under the Companies (Accounting Standard) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The Consolidated Financial Statements have been prepared in accordance with the Accounting Standard 21 - Consolidated Financial Statements (AS 21). All intercompany transactions, balances and unrealized surplus and deficits on transactions amongst group companies are eliminated. The Companies considered in the consolidated financial statements which along with Rain Commodities Limited constitute the group (the Group or Rain Group) are: Ownership in % either directly or through Subsidiaries December 31, 2012 100 100 100 100 100 80.5 51 100 100 100 100 100 December 31, 2011 100 100 NA 100 100 61 51 100 100 100 100 100
Sl. No. 1. 2. 3. 4. 5. 6. 7. 8. 9.
Name of the Company
Relationship
Country of Incorporation India United States of America India British Virgin Island India United States of America Egypt United States of America United States of America United States of America India United States of America
Rain Cements Limited (RCL) Rain Commodities (USA) Inc. (RCUSA) Rain Coke Limited (RCOKE)*
Subsidiary Subsidiary Subsidiary
Moonglow Company Business Inc. Subsidiary of RCL (Moonglow) Renuka Cement Limited (RenCL)# Rain Global Services LLC (RGS) RGS Egypt Limited (RGS Egypt) Rain Carbon USA, LLC (RCUSA1) Carbon Holdings USA, LLC (CHUSA)
@
Subsidiary of RCL Subsidiary of RCUSA Subsidiary of RGS Subsidiary of RCUSA Subsidiary of RCUSA1 Subsidiary of CHUSA Subsidiary of CPCUSA Subsidiary of CPCUSA
10. CPC Holdings USA, LLC (CPCUSA) 11. Rain CII Carbon (Vizag) Limited (RCCVL) 12. Rain CII Carbon LLC (RCC)
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Sl. Name of the Company No. 13 14. 15. 16. 17. 18. 19. CII Carbon Corp. (CIICC)
Relationship
Country of Incorporation United States of America Mauritius China United States of America United States of America Canada Canada
Ownership in % either directly or through Subsidiaries December 31, 2012 100 100 100 100 100 100 100 December 31, 2011 100 100 100 NA NA NA NA
Subsidiary of RCC
Rain CII Carbon Mauritius Limited Subsidiary of RCC (RCCML) Zhenjiang Xin Tian Tansu Co. Ltd (ZXTTCL) Rain CTP Inc. (Rain CTP) ** Subsidiary of RCCML Subsidiary of RCC
Rain Escrow Corp (Escrow Corp) *** Subsidiary of RCC 9274 5520 Quebec Inc (CANSPV1) **** Rain (0952853) Holdings Ltd (CANSPV2) ***** Subsidiary of Rain CTP Subsidiary of Rain CTP
* Rain Coke Limited was incorporated on March 19, 2012 ** Rain CTP Inc. was incorporated on October 15, 2012 *** Rain Escrow Corp was incorporated on December 3, 2012 **** 9274 5520 Quebec Inc was incorporated on December 14, 2012 ***** Rain (0952853) Holdings Ltd was incorporated on December 28, 2012 @ RCUSA increased its investment in the equity of RGS effective June 30, 2012 thereby increasing its shareholding in RGS from 61% to 80.5% # Renuka Cement Limited (RenCL) had become a subsidiary of Rain Cements Limited with effect from January 14, 2011. As permitted by AS 21, for the purpose of consolidation, financial statements of RenCL as at December 31, 2010 have been considered. No adjustments have been made to such financial statements for transactions between January 1, 2011 and January 13, 2011 as they were not material.
(b) Use of estimates The preparation of the financial statements in conformity with the Indian GAAP requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made. (c) Revenue Recognition i) ii) Calcined Petroleum Coke - Sales are recognized on dispatch of goods and upon transfer of property in the goods to customers. Sales are inclusive of excise duty, as applicable. Energy (Power/Steam) - Sale of energy is exclusive of electricity duty payable to the State Government and recognized in accordance with contract terms.
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iii) Cement - Sales are recognised on despatch of goods to customers. Gross sales includes excise duty, but excludes sales tax and trade discounts. (d) Other Income Dividend income is recognized when the Companys right to receive dividend is established. Interest income is recognized using the time proportion method, based on the transactional interest rates. (e) Fixed Assets, Depreciation, Impairment Fixed Assets are stated at cost/professional valuation less accumulated depreciation. Cost includes freight, installation cost, duties and taxes, interest on specific borrowings utilized for financing the qualifying fixed assets and other incidental expenses. Depreciation is provided on straight-line method at the rates specified in the Schedule XIV to the Companies Act, 1956 or based on the estimated economic useful lives whichever is higher. The cost of land used for mining is amortized over the estimated period of mining reserves. Individual assets costing rupees five thousand or below are fully depreciated in the year of acquisition and put to use. All fixed assets are assessed for any indication of impairment at the end of each financial year. On such indication, the impairment loss being the excess of carrying value over the recoverable value of the assets is charged to the Statement of Consolidated Profit and Loss in the respective financial years. The impairment loss recognized in prior years is reversed in cases where the recoverable value exceeds the carrying value, upon reassessment in the subsequent years. (f) Inventories Inventories are valued at lower of cost and net realisable value. Raw material cost is computed on the basis of weighted average cost per unit of measurement after providing for obsolescence, if any. Finished goods and work in progress are valued at lower of cost and net realisable value. Cost is determined on a weighted average basis and comprises material, labour and applicable overhead expenses. Stores and spares are valued at cost determined on weighted average basis, or below. Traded goods are valued at lower of weighted average cost and net realizable value. Goods in transit are valued at cost or below. (g) Foreign Currency Transactions Transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transactions. Monetary assets and liabilities denominated in foreign currency are restated at the prevailing year end rates. The resultant gain/loss upon such restatement along with the gain/loss on account of foreign currency transactions are accounted in the Statement of Consolidated Profit and Loss. In respect of items covered by forward exchange contracts, the premium or discount arising at the inception of such a forward exchange contract is amortised as expense or income over the life of the contract. Any profit or loss arising on cancellation or renewal of such a forward contract is recognized in the Statement of Consolidated Profit and Loss. All subsidiaries of the Group are in the nature of non-integral operations in terms of Accounting Standard 11, The effects of changes in foreign exchange rates. All monetary and non monetary assets and liabilities are translated at the rate prevailing on the balance sheet date. All revenue and expense transactions during the year are reported at average rate. The resultant translation adjustment is reflected as Foreign Currency Translation Reserve and included under Reserves and Surplus.
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The Group has designated foreign currency loans availed as a hedging instrument to hedge its net investment in non-integral foreign operations, with effect from January 1, 2009. Accordingly, the translation gain/(loss) on such foreign currency loans, determined as an effective net investment hedge is recognized in Foreign Currency Translation Reserve (FCTR) included under Reserves and Surplus and would be transferred to the Statement of Consolidated Profit and Loss upon sale or disposal of the investment in the non-integral foreign operations. The Group during 2010, pursuant to the scheme of arrangement, transferred the foreign currency loans availed by one of its wholly owned subsidiaries to another wholly owned subsidiary and the investment continues to remain with the same entity. The Group continues to consider the foreign currency loans as a hedging instrument to hedge its net investment in non-integral foreign operations since the loans and the related investments continue to be within the Group. (h) Investments Long term investments are carried at cost less provision for diminution, other than temporary, if any, in the value of such investments. Current investments are carried at the lower of cost and fair value. (i) Employee Benefits Defined Contribution Plans Contributions paid/payable under defined contribution plans are recognized in the Statement of Consolidated Profit and Loss each year. Contribution plans comprises Superannuation covered under a scheme administered and managed by ICICI Prudential Life Insurance Company Limited, and Provident Fund administered and managed by the Government of India. The Company makes monthly contributions and has no further obligations under the plan beyond its contributions. The Group has established separate group savings plan for all hourly and salaried employees in the United States of America. Employer contributions are made at the discretion of the employer. Defined Benefit Plans The Parent Company and its Indian subsidiaries have a defined benefit Gratuity plan covering all its employees. Gratuity is covered under a scheme administered by Life Insurance Corporation of India (LIC). The liability as at the balance sheet date is provided based on an actuarial valuation carried out by an independent actuary, in accordance with Accounting Standard 15 on Employee Benefits (AS 15). In respect of the subsidiary Company in United States of America, the Company has a defined benefit retirement plan covering all its employees in United States of America (the Pension Plan). The Pension Plan covers hourly employees under which these employees are paid based on respective years of service and age. The Group contributes to the pension plan to at least meet the minimum requirements as required by law in the United States of America. The Group contributes to post retirement plan based on pay-as-you-go policy. The Group sponsors two defined benefit post retirement plans that cover certain employees in United States of America. One plan provides post retirement medical and dental benefits, the other plan provides life insurance benefits. Both plans are non contributory and neither is funded. Other Long Term Employee Benefits Other long term employee benefits comprise compensated absences which is provided based on an actuarial valuation carried out in accordance with AS-15 at the end of the year.
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(j)
Segment Reporting The group has considered business segment as the primary segment for reporting. The products considered as business segment are: Carbon Products (CPC/Pet Coke and Power) Cement The above business segments have been identified based on the nature of products, risks and return, organization structure and internal financial reporting. The geographical segments considered for disclosures are: Sales within India - represents sales made to customers located within India. Sales outside India - represents sales made to customers located outside India.
(k) Earnings per share The earnings considered in ascertaining the companys Earnings Per Share (EPS) comprise net profit after tax (and includes the post tax effect of any extra ordinary items). The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the year.Dilutive potential equity shares are deemed to be converted as of the beginning of the year, unless they have been issued at a later date. The number of shares used for computing the diluted EPS is the weighted average number of shares outstanding during the year after considering the dilutive potential equity shares. (l) Taxes on Income Current tax is determined based on the amount of tax payable in respect of taxable income for the year. Deferred tax is recognized on timing differences being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods subject to consideration of prudence. Deferred tax assets on unabsorbed depreciation and carry forward of losses are not recognized unless there is a virtual certainty that there will be sufficient future taxable income available to realize such assets. Deferred tax assets and liabilities have been measured using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date. (m) Borrowing Costs Borrowing costs include interest and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalisation of such asset is added to the cost of the assets. (n) Provisions and contingencies A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the notes.
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Name of the Shareholder
Note 3: Share capital Authorized: Equity Shares of Rs. 2 each Redeemable preference shares of Rs. 100 each TOTAL Issued, subscribed and paid up Equity Shares of Rs. 2 each TOTAL
590,000,000 4,900,000 594,900,000 341,701,602 341,701,602
1,180,000 490,000 1,670,000 683,403 683,403
590,000,000 1,180,000 4,900,000 490,000 594,900,000 1,670,000 349,482,981 349,482,981 698,967 698,967
Notes: (i) Reconciliation of the number of equity shares and amount outstanding at the beginning and at the end of the year Particulars For the year ended December 31, 2012 Number of Amount Shares 349,482,981 7,644,271 341,838,710 137,108 341,701,602 698,967 15,290 683,677 274 683,403 For the year ended December 31, 2011 Number of Amount Shares 354,172,895 3,723,675 350,449,220 966,239 349,482,981 708,346 7,447 700,899 1,932 698,967
As at beginning of the year Less: Equity Shares bought back and extinguished during the year Less: Equity Shares bought back and pending to be extinguished As at end of the year
(ii) Rights, preferences and restrictions attached to the equity shares The Company has only one class of equity shares having a par value of Rs. 2 each per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to number of equity shares held by the shareholders During the year ended December 31, 2012, the amount of per share dividend recognized as distribution to equity shareholders was Rs. 1.10 (year ended December 31, 2011: Rs. 1.10)
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(iii) Shareholders holding more than 5% of the equity shares Name of the Shareholder As at December 31, 2012 Number of % Shares 37,766,675 31,634,505 25,316,465 19,935,591 18,150,000 17,673,225 17,404,110 11.05 9.25 7.41 5.83 5.31 5.17 5.09 As at December 31, 2011 Number of % Shares 37,766,675 32,710,205 25,316,465 17,673,225 17,750,000 10.78 9.33 7.22 5.04 5.06
Sujala Investments Private Limited Reliance Capital Trustee Co. Limited (including all managed funds) Focus India Brands Private Limited Merrill Lynch Capital Markets Espana S.A. S.V. HSBC Bank (Mauritius) Limited A/c CIR International Anantha A.L. Reddy Meghamala Enterprises Private Limited ICICI Prudential discovery fund
(iv) Aggregate number of shares issued as fully paid up pursuant to contract without payment being received in cash during the period of five years immediately preceding the reporting date As at December 31, 2012 Number of Shares Equity shares of Rs. 2 each (represents after subdivision of 34,861,286 Equity Shares of Rs. 10 each) allotted to the shareholders of erstwhile Rain Calcining Limited pursuant to the Scheme of Arrangement between the Company and erstwhile Rain Calcining Limited in November, 2007. As at December 31, 2011 Number of Shares
174,306,430
174,306,430
(v) Pursuant to the approval of the shareholders at the Annual General Meeting held on May 12, 2011, each equity share of the Company with a face value of Rs. 10 was sub-divided into five equity shares of Rs. 2 each, with effect from June 16, 2011, being the record date for the said sub-division. (vi) Equity shares bought back (including pending extinguishment) during the last five years: As at December 31, 2012 Number of Shares Aggregate no. of shares [Refer Notes (a), (b) & (c) below] 18,471,293 As at December 31, 2011 Number of Shares 10,689,914
Note: (a) 6,000,000 equity shares of Rs. 2 each fully paid-up (represents after sub-division of 1,200,000 equity shares of Rs. 10 each) were bought back from the shareholders pursuant to buyback of equity shares made during the year ended December 31, 2008. (b) 10,000,000 equity shares of Rs. 2 each fully paid-up were bought back from the shareholders pursuant to buyback of equity shares during the period of November 14, 2011 to March 29, 2012 (Refer Note 29.1). (c) 2,471,293 equity shares of Rs. 2 each fully paid-up were bought back from the shareholders pursuant to buyback of equity shares during the period of October 22, 2012 to December 31, 2012 (Refer Note 29.1).
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As at December 31, 2012 Note 4: Reserves and surplus (a) Capital Reserve (b) Capital redemption reserve Opening balance Add: Transferred from surplus in Statement of Consolidated Profit and Loss Closing balance (c) Securities premium account Opening balance Less: Utilised towards buy back of equity shares Closing balance (d) General reserve Opening balance Add: Transferred from surplus in Statement of Consolidated Profit and Loss Closing balance (e) Foreign currency translation reserve Opening balance Add: Effect of foreign exchange rate variations Closing balance (f) Surplus in Statement of Consolidated Profit and Loss Opening balance Add: Profit for the year Reversal of Dividend proposed in earlier year Less: Proposed final dividend (net of dividend on shares bought back) (Refer note 3(ii)) Tax on dividend (net of eligible credit) Transfer to General Reserve Transfer to Capital Redemption Reserve Closing balance TOTAL 17,010,242 4,577,488 371,189 1,591,567 436,086 2,027,653 880,235 95,983 976,218 969,098 260,368 708,730 21,379 15,564 36,943 37,468
As at December 31, 2011 37,468
12,000 9,379 21,379
1,097,372 128,274 969,098
730,327 149,908 880,235
403,568 1,187,999 1,591,567
10,944,397 6,641,248 26,021 380,242
58,746 95,983 15,564 21,046,248 24,833,260
61,895 149,908 9,379 17,010,242 20,509,989
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As at December 31, 2012 Note 5: Long-term borrowings Term loans From banks - Secured From other parties - Secured - Unsecured Less: Current portion of Long-term borrowings disclosed under Note 11 - Other current liabilities
8,735,306 33,333 23,396 6,588,583 2,203,452
9,735,646 100,000 32,331 1,315,117 8,552,860 21,306,400 21,306,400 952,178 10,284 941,894 717,003 31,518,157
Senior secured notes (Refer Note 29.2) 8.00% Senior secured notes (due for repayment in December 2018) 8.25% Senior secured notes (due for repayment in January 2021) 8.50% Senior secured notes (due for repayment in January 2021) Deferred payment liabilities - Unsecured Less: Current portion of Long-term borrowings disclosed under Note 11 - Other current liabilities Other loans and advances - Unsecured TOTAL Notes: (i)
20,816,400 21,912,000 15,189,618 57,918,018 939,482 41,661 897,821 736,835 61,756,126
Term loans availed by Rain Commodities Limited are secured by a pari passu: (a) (b) First Charge on all immovable and movable properties and Second Charge on all current assets of Rain Cements Limited, a wholly owned subsidiary of the Company.
(ii) The Senior Secured Notes of Rain CII Carbon LLC are secured by substantially all of the Companys assets and are guaranteed by the Companys subsidiaries in U.S.A. on a joint and several basis. (iii) Term loans from banks availed by Rain CII Carbon (Vizag) Limited are secured by an irrevocable undertaking to provide security over all the immovable assets of the Company and further secured by a first ranking fixed charge on the prepayment account of the Company and first ranking floating charge on the movable assets of the Company, both present and future. Further secured by pledge of equity shares of the Company held by CPC Holdings USA, LLC and Rain Cements Limited and also secured by guarantee from CPC Holdings USA, LLC. (iv) The term loans availed by Rain Cements Limited are taken from Indian Bank, IDBI Bank Limited and Life Insurance Corporation of India. They are secured by pari passu first charge on the movable and immovable properties excluding book debts and stocks of finished goods and semi-finished goods of the Company. They are further secured by personal guarantee of certain promoter directors.
97

As at December 31, 2012 Note 6: Deferred tax liabilities (net) A. Deferred tax liabilities - on account of depreciation Deferred tax assets - other fiscal differences employee benefits others Deferred tax liabilities [A-B] 4,220,400 4,220,400 B.
2,728,218 2,728,218
28,377 73,776 102,153 4,118,247
23,281 164,900 188,181 2,540,037
Note 7: Other long term liabilities Trade Payables - Other than acceptances Others Interest accrued but not due on borrowings Retention monies payable towards fixed assets TOTAL Note 8: Long-term provisions Provision for employee benefits - Compensated absences - Gratuity - Other defined benefit plans TOTAL Note 9: Short-term borrowings Loans repayable on demand From banks - Buyer's credit - Secured - Unsecured - Cash credit - Secured - Working capital - Secured From other parties - Unsecured TOTAL 28,409 52,270 157,054 237,733 22,913 43,228 495,427 561,568 77,727 482,338 560,065 363,913 2,458 366,371
332,279 78,126 273,900 197,800 882,105
3,043,160 549,941 925,034 106,532 4,624,667
98

Note 9: Short-term borrowings (Contd.) Notes: (i) Secured borrowings: Borrowings from Banks availed by Rain Commodities Limited are secured by charge on the current assets of the Company. Cash credit and buyers credit availed by Rain Cements Limited are secured by an exclusive first charge on the whole of the present and future stocks of raw materials, goods in process, manufactured goods, stores and spares, book debts, outstanding monies receivables and claims belonging to the Company. Borrowings availed by Rain CII Carbon (Vizag) Limited are secured by an irrevocable undertaking to provide security over all the immovable assets of the said Company and further secured by a first ranking fixed charge on the Prepayment account of the said Company and first ranking floating charge on the moveable assets of the said Company, both present and future. Further secured by pledge of Equity Shares of the Company held by CPC Holding USA, LLC and Rain Cements Limited and also secured by a guarantee from CPC Holdings USA, LLC. The short term borrowings from banks availed by Rain Global Services LLC are secured by Corporate Guarantee given by Rain Commodities (USA) Inc. (ii) Corporate Guarantees have been furnished by Rain Cements Limited as security towards unsecured borrowings of Rain CII Carbon (Vizag) Limited. Note 10: Trade payables Acceptances Other than acceptances TOTAL Note 11: Other Current Liabilities Current maturities of long-term borrowings (Refer Note below) Interest accrued but not due on borrowings Unpaid dividends Other payables - Statutory remittances - Trade/security deposits received - Advances from customers - Retention money - Payables on purchase of fixed assets - Provision for dealer discounts - Others TOTAL Note: Refer note in Note 5: Long-term borrowings, for details of security Note 12: Short term provisions Provision for employee benefits - Compensated absences Provision - Others - Provision for proposed dividend - Provision for tax on proposed dividend TOTAL 6,021,109 6,021,109 6,630,244 168,352 25,646 365,276 348,947 48,733 352 41,997 156,988 77,719 7,864,254 520,277 3,602,856 4,123,133 1,325,401 190,131 20,006 401,226 251,996 45,565 1,652 48,004 146,843 238,090 2,668,914
41,400 372,836 60,483 474,719
31,708 380,242 63,153 475,103
99
Note 13: Fixed Assets Gross Block (At Cost/ Professional Valuation) As at As at December December 31, 2012 31, 2011 For the On Currency As at year Deletions realingment December 31, 2012 As at December 31, 2012 Depreciation Net Block As at December 31, 2011

335,307 20,034 77,435 315 3,010 7,679 343,301 23,044 77,435 1,083 7,049 175 6,497 1,258 13,546 343,301 21,786 63,889 335,307 18,951 70,386 285,098 358,337 967 4,998 16,286 669,011 43,141 1,110 4,653 7,138 56,042 49,166 3,819,861 418 221,715 16,274,411 246 131,051 487 109,834 169 84,072 279,462 20,863,427 711,536 172,103 418 5,018,904 995,285 34,858 5,190 49,109 12,749 19,733 7,640 5,842,690 1,199,639 32,499 661 1,847 2,256 37,263 10,684 79,641 178 180 109 90,792 894,323 2,925,538 2,774,061 418 6,061,331 10,213,080 10,718,596 39,565 91,486 96,090 60,191 49,643 59,893 25,226 58,846 55,022 7,095,858 13,767,569 14,128,306 122 122 669,133 15,524 24,607 24,607 80,649 638,613 23,426,139 240 638,613 23,426,379 918,075 44,289,806 5,094,614 42,783,247 19 43 19 43 5,842,709 1,199,682 4,308,188 1,129,391 37,263 10,191 90,792 415,321 - 23,426,139 22,812,133 62 178 99 62 23,426,317 22,812,232 7,095,920 37,193,886 5,842,709 36,940,538
Description
As at Additions Deletions Currency December realingment 31, 2011
100
Tangible assets Land - Free Hold (Refer Note (i) below) Land - Mining Land - Lease Hold Buildings (Refer Note (ii) below) Railway Siding Plant and Equipment Furniture and Fixtures Office Equipments Vehicles
3,485,597 418 15,737,500 130,948 109,002 74,755 19,970,996
Intangible assets Goodwill on consolidation (Refer Note (iii) below) Software
Total Year ended December 31, 2011
22,812,133 118 22,812,251 42,783,247
36,691,734 1,012,423
Notes:
(i)
Represents land measuring 11 acres 82 cents taken on lease from Visakhapatnam Port Trust till October 27, 2022, in respect of which the lease deed is in the process of being executed.
(ii)
Includes Buildings constructed on leasehold land and depreciated over the lease period ending on October 27, 2022.
(iii) Reduction to Goodwill on consolidation is on account of increase in investment in the equity of Rain Global Services LLC from 61.0% to 80.5% effective June 30, 2012.

As at December 31, 2012 Note 14: Non-current investments Trade Investments (value at cost unless stated otherwise) (unquoted) Investment in equity instruments of other entities - Andhra Pradesh Gas Power Corporation Limited 134,000 (December 31, 2011 - 134,000) Equity Shares of Rs. 10 each fully paid up Investment in government securities - National Savings Certificates TOTAL Note 15: Long-term loans and advances (Unsecured, considered good) Capital advances Security deposits Prepaid expenses Balances with government authorities Advance income tax (net of provision for tax) TOTAL Note 16: Other non current assets Interest accrued on deposits Bank balances (Refer Note 19 - Cash and Bank balances) TOTAL Note 17: Inventories (At lower of cost and net realisable value) a) Raw materials Goods-in-transit b) c) d) Work-in-progress Finished goods (other than those acquired for trading) Stock-in-trade (acquired for trading) Goods-in-transit Stores and spares Goods-in-transit Packing Materials Coal and Fuel Goods-in-transit TOTAL
16,000
16,000
130 16,130
125 16,125
166,742 141,008 39,364 784,793 1,131,907
50,346 115,223 1,210 47,688 694,771 909,238
870 6,526 7,396
1,012 4,844 5,856
e)
f) g)
5,336,935 267,135 5,604,070 565,590 2,017,540 476,718 252,212 728,930 492,165 14,386 506,551 35,722 322,438 68,713 391,151 9,849,554
5,290,028 330,241 5,620,269 214,402 2,599,918 1,430,939 1,430,939 508,391 508,391 23,788 157,496 414,734 572,230 10,969,937
101

As at December 31, 2012 Note 18: Trade receivables Trade receivables outstanding for a period exceeding six months from the date they were due for payment - Secured - Unsecured, considered good - Doubtful Less: Provision for doubtful trade receivables Other Trade receivables - Secured - Unsecured, considered good
16,445 225 41,297 57,967 41,297 16,670 172,556 5,459,936 5,632,492
13,814 9,719 18,410 41,943 18,410 23,533 123,307 6,776,734 6,900,041 6,923,574
TOTAL
5,649,162
Note 19: Cash and Bank balances Cash and cash equivalents Cash on hand Cheques, drafts on hand Balances with banks - in current accounts - in EEFC accounts - in deposit accounts (Refer Note below)
672 28,170 2,747,302 7,845 5,281,418 8,065,407
916 26,476 4,327,138 474,581 3,017,984 7,847,095
Other bank balances Balances held as margin money against guarantees and other commitments Unpaid dividend accounts In Escrow accounts (Refer Note 29.2) Less: Non Current Bank Balances (Refer Note 16 - Other non-current assets) TOTAL
73,931 25,646 38,498,646 6,526 38,591,697 46,657,104
431,697 20,006 4,844 446,859 8,293,954
Notes: (i) Depoist accounts include Rs. NIL (December 31, 2011 : Rs. NIL) deposits which have a original maturity of more than 12 months.
102

As at December 31, 2012 Note 20: Short-term loans and advances (Unsecured, considered good) Advances to related parties (Refer Note 29.5) - Rain Entertainment Private Limited Security deposits Loans and advances to employees Prepaid expenses Balances with government authorities Loans to others Advance towards share application money Supplier and service provider advances Others TOTAL
100,594 10,132 9,950 171,206 116,710 467,835 168,862 1,045,289
8,079 8,277 177,132 348,450 600,000 315,000 857,154 299,850 2,613,942
Note 21: Other current assets Unbilled Revenue Accruals - Interest accrued on deposits - Interest accrued on Loans Others - Deferred Consideration - Government subsidies receivable TOTAL
26,778 21,578 53,649 33,328 135,333
21,606 33,731 7,890 129,415 46,340 238,982
103

For the year ended December 31, 2012 Note 22: Revenue from operations Sale of products [Refer Note (i) below] Other operating revenues [Refer Note (ii) below] Revenue from operations (gross) Less: Excise duty Revenue from operations (net) Notes: (i) Sale of products comprises: Sale of Calcined Petroleum Coke Sale of Cement Sale of Petroleum Coke Sale of Power Sale of Fly Ash TOTAL (ii) Other operating revenues comprises: Scrap sales Income from sale of Certified Emission Reductions Incentive towards Sales tax and Power tariff Dock revenue TOTAL Note 23: Other income Interest income Interest from banks on: deposits other balances Interest income from long-term investments Interest on loans and advances Interest on income tax refund Other Interest Dividend income from current investments Gain on foreign currency transactions and translation (net) Other non-operating income Gain on derivatives (net) Liabilities/provisions no longer required written back Provision for doubtful debts and advances Miscellaneous income TOTAL 55,552,205 170,653 55,722,858 2,108,373 53,614,485
For the year ended December 31, 2011 58,067,119 194,085 58,261,204 1,866,054 56,395,150
38,661,262 10,487,823 5,375,093 1,009,407 18,620 55,552,205 20,975 89,724 59,954 170,653
43,704,234 9,929,970 3,308,101 1,124,814 58,067,119 29,189 95,485 4,965 64,446 194,085
210,846 2,045 8 5,617 22,122 148,023 388,661 54 88,363 6,223 165,628 16,464 188,315 665,393
108,411 4,934 8 60,231 173,584 2,839 2,262 31,092 141 10,663 44,158 220,581
104

For the year ended December 31, 2012 Note 24: Changes in inventories of finished goods, work-in-progress and stock-in-trade Opening Stock Finished goods Work-in-progress Stock-in-trade
2,599,918 214,402 1,430,939 4,245,259
1,586,812 257,553 694,068 2,538,433 2,599,918 214,402 1,430,939 4,245,259 (1,706,826)
Closing Stock Finished goods Work-in-progress Stock-in-trade
2,017,540 565,590 728,930 3,312,060
Net (Increase)/Decrease
933,199
Note 25: Employee benefits expense Salaries and wages Contributions to provident and other funds Staff welfare expenses TOTAL
1,856,554 83,070 458,064 2,397,688
1,566,318 55,525 317,205 1,939,048
Note 26: Finance cost Interest expense on borrowings Other borrowing costs Loss on foreign currency transactions and translation (net) TOTAL
2,014,115 1,651,457 62,060 3,727,632
2,156,873 162,122 136,565 2,455,560
105

For the year ended December 31, 2012 Note 27: Other expenses Consumption of stores and spares Consumption of packing materials Change in excise duty on finished goods Power and fuel Water Repairs and maintenance - Plant and machinery - Buildings - Others Insurance Rent Rates and taxes Communication expenses Travelling and conveyance Printing and stationery Selling and distribution expenses Advertisement Cash discounts Sales discount Donations and contributions Legal and professional charges Payment to auditors [Refer Note below] Directors' sitting fees Commission to directors Provision for doubtful trade receivables Loss on sale of fixed assets (net) Loss on foreign currency transactions and translation (net) Miscellaneous expenses Less: Expense capitalised TOTAL Note: Payment to auditors comprises (excluding service tax): Statutory audit fees Limited review fee Other services Reimbursement of expenses TOTAL Note 28: Tax expense Current Tax (i) Current tax for current year (ii) Current tax relating to earlier years Net current tax Deferred Tax TOTAL 907,902 426,768 (29,585) 3,331,064 57,624 1,108,722 6,878 83,165 262,269 220,191 167,439 63,610 133,953 6,093 3,641,772 2,273 95,013 46,679 21,616 387,423 51,656 1,520 34,900 23,991 5,158 726,195 11,784,289 11,784,289
For the year ended December 31, 2011 750,680 379,661 435 2,464,228 51,816 1,702,238 4,294 117,267 196,615 222,419 130,222 51,556 119,604 5,944 2,822,490 2,301 76,247 46,657 17,727 410,679 27,801 1,320 32,400 4,159 435,769 655,195 10,729,724 27,114 10,702,610
16,874 4,293 29,792 697 51,656
20,152 4,104 3,416 129 27,801
1,012,354 (179,404) 832,950 1,347,270 2,180,220
3,211,830 12,763 3,224,593 200,940 3,425,533
106

Note 29.1: Buy-back of Equity Shares The Board of Directors of the Company, during their meeting held on October 25, 2011, approved the buyback of 10,000,000 equity shares of Rs.2/- each at maximum price of Rs.41/- per share for an amount not exceeding Rs. 350,000. The board decided to implement the buyback offer through the open market purchases in the stock exchanges. Pursuant to the offer, the Company commenced the buyback on November 14, 2011. During the year ended December 31, 2011, the Company has bought back 4,689,914 equity shares of Rs.2/- each aggregating Rs. 137,653 and extinguished 3,723,675 equity shares upto December 31, 2011 and the balance 966,239 equity shares were extinguished subsequent to the year end. The Company bought back and extinguished the balance 5,310,086 equity shares of Rs.2/- each aggregating Rs. 182,255 during the current financial year. Further to the completion of the scheme of buyback approved by the board of directors on October 25, 2011, the Shareholders of the Company have approved another scheme for buyback of equity shares of Rs.2/- each vide postal ballot on October 1, 2012 through open market transactions at a price not exceeding Rs.46/- per share for an amount not exceeding Rs. 460,000. The Company commenced the buyback of equity shares on October 22, 2012 and bought back 2,471,293 equity shares of Rs.2/- each aggregating Rs. 93,677 and extinguished 2,334,185 equity shares upto December 31, 2012 and the balance 137,108 equity shares were extinguished subsequent to the year end. Accordingly, Rs. 15,564 (December 31, 2011: 9,379) has been reduced from paid-up equity share capital and in accordance with the provisions of Section 77A of the Companies Act, 1956, Rs. 260,368 (December 31, 2011: 128,274) has been utilized from securities premium account and Rs. 15,564 (December 31, 2011: 9,379) transferred to the capital redemption reserve from surplus in Statement of Consolidated Profit and Loss. Note 29.2: (i) On January 4, 2013 Rain CII Carbon LLC, USA (RCC), a wholly owned step-down subsidiary of the Company, completed the acquisition of RTGERS N.V. (RTGERS), a Belgium headquartered Coal Tar Pitch (CTP) and chemical manufacturer, from funds managed by Triton, after receiving the necessary regulatory approvals. RCC acquired 100% of the shares of RTGERS pursuant to an agreement with Triton for a gross enterprise value of 702.0 million plus certain contingent payments not exceeding 27.0 million during the next three years. RCC funded the transaction through a combination of internal cash accruals and proceeds from the issuance of senior secured notes. RCC issued two tranches of senior secured notes with an 8 year tenure consisting of $ 400.0 million of US dollar denominated notes and 210.0 million of Euro denominated notes. The proceeds from the issue of senior secured notes were kept in an Escrow Bank account and subsequently utilised for completion of RTGERS acquisition. (ii) Expenses incurred in relation to the acquisition of RTGERS included in the Statement of Consolidated Profit and Loss are: Year ended December 31, 2012 Expenses incurred in connection with the issue of senior secured notes by RCC (included in Note 26 - Finance costs) Professional charges and other expenses incurred by RCC in connection with the acquisition (included in Note 27 - Other expenses) TOTAL Year ended December 31, 2011
1,475,810
313,381 1,789,191
107

Note 29.3: Contingent liabilities and commitments (to the extent not provided for) As at December 31, 2012 (i) Contingent liabilities (a) In respect of demands/claims arising on account of: Income tax Wheeling charges [Refer Note below] Operating charges of state load dispatch center and minimum energy/demand Electricity duty Customs Duty, Sales Tax, Service Tax and Excise Duty related matters under dispute Fuel Surcharge Adjustment levied by Electricity Distributing Companies 25,615 392,656 5,777 15,724 476,511 34,570 274,105 85,362 407,673 5,777 15,724 444,529 519,903 As at December 31, 2011
(b) Bank guarantees outstanding (c) Corporate Guarantee issued on behalf of wholly owned subsidiaries: Rain Commodities USA Inc., US$ 25 million (December 31, 2011: US$ 50 million)
1,369,433
2,663,300
(ii) Commitments Estimated amounts of contracts remaining to be executed on capital account [net of Capital advance Rs. 166,742 (December 31, 2011: Rs. 50,346)]
155,339
1,539,574
Note: During 2002, the erstwhile Rain Calcining Limited had disputed the order of Andhra Pradesh Electricity Regulatory Commission (APERC) in respect of wheeling charges before the Honble High Court of Andhra Pradesh. The Honble High Court of Andhra Pradesh had set aside the order of APERC. Transmission Corporation of Andhra Pradesh (AP Transco) filed a Special Leave Petition in the Supreme Court of India against the order of the High Court. The final verdict of Supreme Court of India is awaited. The contingent liability has been computed on the basis of imputed cost till December 31, 2012 per the terms of the said APERC order.
108

Note 29.4: Segmental Reporting a) Business Segment Year ended December 31, 2012 Carbon Products Revenue External Sales (net of excise duty and taxes on sales) Inter- Segment Sales Total Less: Eliminations Total Revenue from sale of products Other operating income Total Revenue Cement Total Year ended December 31, 2011 Carbon Products Cement Total
44,356,811 795,103 45,151,914 (795,103) 44,356,811 159,433 44,516,244
9,087,021 8,307 9,095,328 (8,307) 9,087,021 11,220 9,098,241 915,213 -
53,443,832 803,410 54,247,242 (803,410) 53,443,832 170,653 53,614,485 9,890,594 9,890,594 3,727,632 (665,393) 6,828,355 2,180,220
47,528,071 763,938 48,292,009 (763,938) 47,528,071 169,145 47,697,216 10,663,798 60,011,070 60,011,070 8,528,024 8,528,024 1,306,449 796,911
8,672,994 12,110 8,685,104 (12,110) 8,672,994 24,940 8,697,934 1,643,794 7,427,578 7,427,578 2,502,930 2,502,930 143,374 332,480
56,201,065 776,048 56,977,113 (776,048) 56,201,065 194,085 56,395,150 12,307,592 12,307,592 2,455,560 (220,581) 10,072,613 3,425,533 6,647,080 67,438,648 714,777 68,153,425 11,030,954 3,003,438 14,034,392 1,449,823 1,129,391
Result Segment Result 8,975,381 Operating Profit Finance costs Unallocated income Profit Before Taxation Provision for Taxation Profit After Taxation before Minority Interest Segment Assets 99,579,433 Unallocated Corporate Assets Total Assets 99,579,433 Segment Liabilities 6,874,293 Unallocated Corporate Liabilities Total Liabilities 6,874,293 Capital Expenditure 4,991,296 Depreciation 851,356 b) Geographical Segment
4,648,135 7,161,671 106,741,104 810,439 7,161,671 107,551,543 2,076,483 8,950,776 2,076,483 292,845 348,326 4,577,212 13,527,988 5,284,141 1,199,682
Year ended December 31, 2012 Revenue from Segment sale of products to Assets external customers India Outside India 14,532,285 38,911,547 53,443,832 15,589,443 91,151,661 106,741,104
Year ended December 31, 2011 Revenue from Segment sale of products to Assets external customers 16,180,467 40,020,598 56,201,065 18,697,404 48,741,244 67,438,648
109

Note 29.5: Related Party Disclosures a) Names of related parties and description of relationship Enterprise where key managerial personnel along with their relatives exercise significant influence a) b) c) d) e) f) g) h) Sujala Investments Private Limited Focus India Brands Private Limited Nivee Holdings Limited Arunachala Holdings Limited PCL Financial Services Limited Rain Entertainment Private Limited (REPL) Nivee Property Developers Private Limited (NPDPL) Pragnya Priya Foundation (PPF) with effect from January 25, 2012 Mr. N. Radha Krishna Reddy Chairman Mr. N. Jagan Mohan Reddy Managing Director with effect from February 10, 2011 Mr. N. Sujith Kumar Reddy Executive Director upto February 10, 2011
Key Management Personnel
a) b)
c) b) Transactions with related parties Year Ended December 31, 2012 Nature of Transactions
Enterprises where Key Managerial Personnel along with their relatives exercise significant influence 89,742 10,000 26 436
Key Management Personnel 26,829 23,468 31,899 -
Balance Outstanding to/(from) 12,500 10,000 (263,625) -
Managerial Remuneration - N. Jagan Mohan Reddy - N. Sujith Kumar Reddy Dividend Paid Donations Given - PPF Sales / Receivables - REPL - NPDPL Advance given towards purchase of raw material - REPL 367,728 (100,594)
110

Year Ended December 31, 2011 Nature of Transactions Enterprises where Key Managerial Personnel along with their relatives exercise significant influence 75,057 523 377 Key Management Personnel 27,076 24,391 26,679 Balance Outstanding to/(from) 15,000 7,500 (89) -
Managerial Remuneration - N. Jagan Mohan Reddy - N. Sujith Kumar Reddy Dividend Paid Sales/Receivables - REPL - NPDPL Advance given towards purchase of raw material - REPL Note 29.6: The Group has entered into various operating lease agreements for assets comprising of storage and other facilities and amounts aggregating Rs. 220,191 (December 31, 2011 - Rs. 222,419) paid under such agreements have been charged off in the Statement of Consolidated Profit and Loss. These agreements are cancellable in nature and there is no restriction in respect of such leases. Note 29.7: Earnings per Share (EPS) As at December 31, 2012 a. b. Profit after Taxation Weighted average number of equity shares of Rs. 2/- each outstanding during the year (Nos.) (Refer Note below) Earnings per Share c. Basic and Diluted - [a]/[b] - (Rs.) 4,577,488 As at December 31, 2011 6,641,248 95,725 -
345,528,163 13.25
354,009,317 18.76
Note: During the previous year 2011, equity shares of the Company with a face value of Rs. 10/- each was sub-divided into 5 equity shares of Rs. 2/- each. Note 29.8: Net Investment Hedge The Group has designated the foreign currency loan as a hedging instrument to hedge its net investment in a non-integral foreign operation, with effect from January 1, 2009. The translation loss for the year ended December 31, 2012 on such foreign currency loan, determined as an effective net investment hedge, recognized in the Foreign Currency Translation Reserve Account included in Note 4 - Reserves and surplus is Rs. 122,429 (December 31, 2011 Rs. 785,001).
111

Note 29.9: The Company recognises income from sale of Certified Emission Reduction (CER's) on conclusion of CER sale to ultimate buyers Note 29.10: The Company had paid an amount of Rs. 120,500 in terms of Memorandum of Understanding (MOU) with certain parties on December 6, 2007 to acquire the entire equity shares of M/s. Birla Cement and Industries Limited (BCIL), which controls certain mining lease rights. On December 1, 2010, the Company had entered into a share purchase agreement with the shareholders of BCIL for the transfer of entire shareholding of BCIL and upon fulfilment of the conditions precedent to the agreement, the entire shareholding was transferred to the Company at a consideration of Rs. 120,500 on January 14, 2011. These equity shares were transferred to Rain Cements Limited (RCL), consequent to which, BCIL has become a wholly owned subsidiary of RCL. In the previous year, the name of BCIL was changed to Renuka Cement Limited in terms of the approval accorded by the Registrar of Companies. Note 29.11: Reversal of Dividend proposed in earlier year represents dividend proposed by Rain Global Services LLC, USA during the year 2010, and reversed during 2011. Note 29.12: Certain promoters of the Company have given undertaking to ICICI Bank Limited and its affiliates not to dispose of 29,274,850 equity shares of Rs. 2/- each held by them in Rain Commodities Limited, pursuant to facilities agreements with such banks. Note 29.13: The following donations were made to political parties during the year: Communist Party of India - Rs. 50 (December 31, 2011: Rs. 100) Communist Party of India (Marxist-Leninist) New Democracy - Rs. 130 (December 31, 2011: Rs. 105). Note 29.14: The Revised Schedule VI has become effective for the periods beginning on or after April 1, 2011 for the presentation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous years figures have been regrouped/ reclassified wherever necessary to correspond with the current years classification/ disclosure.
For and on behalf of the Board of Directors N. Jagan Mohan Reddy Managing Director Place: Hyderabad Date : February 20, 2013 S. Venkat Ramana Reddy Company Secretary N. Sujith Kumar Reddy Director T. Srinivasa Rao Chief Financial Officer
112
ELECTRONIC CLEARING SERVICE (CREDIT CLEARING) MANDATE FORM FOR PAYMENT OF DIVIDEND
To, Karvy Computershare Private Limited (Unit: Rain Commodities Limited) Plot No.17 to 24, Vittal Rao Nagar, Madhapur, Hyderabad - 500 081. Shareholder's authorisation to receive dividends through Electronic Credit Clearing Mechanism. Registered Folio No. : Name of the first/sole shareholder Bank Name Branch Address & Telephone No. of Branch Bank Account Number (As appearing on the Cheque Books) 9 digit code number of the Bank and Branch appearing on the MICR cheque issued by the Bank. (Please attach a blank cancelled cheque, or a photocopy (xerox copy) of a cheque issued to you by your Bank, for verification of the above particulars) Account Type (Please tick the option) q Savings q Current q Cash Credit Bank Account Ledger Folio No. (If any) Effective date of this mandate I hereby, declare that the particulars given above are correct and complete. If the payment transaction is delayed or not effected at all for any reasons, including but not limited to incomplete or incorrect information, I will not hold M/s. Rain Commodities Limited responsible. I agree to discharge the responsibility expected of me as a participant under the scheme. I, further undertake to inform the Company of any subsequent change(s) in the above particulars. Place : Date : Note: 1. Please fill in the information in CAPITAL LETTERS in ENGLISH ONLY. 2. In case of shareholders holding the equity shares in demat form, the shareholders are requested to provide details to their respective Depository participants. Shareholders are also requested to note that changes, if any, intimated by the Demat Account holders directly to the Company will not be considered. Name of First Holder :______________________________ Signature of First Holder :___________________________ ECS Ref. No. : (for Office use only)
113
114

Regd.Office: Rain Center, 34, Srinagar Colony, Hyderabad-500 073, Andhra Pradesh
PROXY FORM
Regd. Folio No. No. of Equity Shares held * DP ID: * Client ID:
I/We ......................................................................................................................................................................... of............................................................................................................................. being a member/members of RAIN COMMODITIES LIMITED hereby appoint...............................................................................of ...................................................................or failing him .............................................................. of......................................................................................as my/our proxy to attend and vote for me/us and on my/our behalf at the 38th Annual General Meeting of the Members of the Company to be held on Saturday, the 27th day of April, 2013 at 11:00 A.M. at KLN Prasad Auditorium, Federation of Andhra Pradesh Chambers of Commerce & Industry (FAPCCI), Red Hills, Hyderabad-500 004, Andhra Pradesh.
Signed this ................................................. day of ........................ 2013.
Please Affix Re.1/Revenue Stamp and sign across
Note: (1) The Proxy need not be a member of the company. (2) The Proxy in order to be effective should be duly stamped, completed and signed and must be deposited at the Registered Office of the Company not less than 48 hours before the time for holding the aforesaid meeting. * Applicable for investors holding shares in Electronic Form.
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Regd.Office: Rain Center, 34, Srinagar Colony, Hyderabad-500 073, Andhra Pradesh
ATTENDANCE SLIP
38th Annual General Meeting, 27th April, 2013 at 11:00 A.M.
Regd. Folio No. No. of Equity Shares held * DP ID: * Client ID:
Name of the Shareholder Name of Proxy I/We hereby record my / our presence at the 38th Annual General Meeting of the members of the Company held on Saturday, the 27th day of April, 2013 at 11:00 A.M. at KLN Prasad Auditorium, Federation of Andhra Pradesh Chambers of Commerce & Industry (FAPCCI), Red Hills, Hyderabad-500 004, Andhra Pradesh. SIGNATURE OF THE MEMBER OR THE PROXY ATTENDING THE MEETING
If Member, Please sign here
If Proxy, Please sign here
Note: This form should be signed and handed over at the Meeting Venue.
* Applicable for investors holding shares in electronic form.
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Regd.Off : Rain Center, 34, Srinagar Colony, Hyderabad-500 073, A.P. India. Phone :040-40401259; Fax: 040-40401214; email:secretarial@priyacement.com website:raincommodities.com Date: March 21, 2013 Dear Shareholder, Sub: Request for dematerialization of Physical equity shares and updation of Bank A/c. details- Reg. With reference to the above stated subject, we bring to your kind notice that the Company's equity shares are traded on BSE Ltd (Scrip code:500339) and National Stock Exchange of India Ltd (Scrip code: RAINCOM) and it is mandatory to trade in demat form only. The Company was allotted ISIN No.INE855B01025 by The National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). The Company is receiving requests from the shareholders with regard to the revalidation of dividend warrants, nonreceipt of dividend warrants due to change of address or lost in transit, request for issue of duplicate share certificates, transmission of shares, etc. To ensure that the dividend and other benefits reaches the shareholders on time and also to avoid the loss of share certificates and dividend warrants in transit, fraudulent encashment of dividend, we make the following request to the shareholders: I. SHAREHOLDERS HOLDING SHARES IN PHYSICAL FORM: We request you to convert the physical shares into demat mode (electronic mode). a) Process for conversion of physical shares into demat : The conversion of physical shares into demat mode is a two steps process as explained below: i) Open a demat account with any of your nearest Depository Participant (DP); and ii) Submit the Demat Request Form (DRF) alongwith physical share certificate to your DP. b) Updation of Bank account particulars: Update your Bank Account No., MICR No.,Name and Address of the Bank with pincode and Email ID with your DP. Also opt for ECS credit of dividend. c) Benefits of holding shares in demat mode is as follows: Elimination of all risks associated with physical share certificates, i.e., loss of share certificates No Stamp duty Immediate transfer and registration of securities Direct credit of dividend to the shareholder's bank account Reduction of cost in correspondence with the Company Faster disbursement of non-cash corporate benefits like rights, bonus, etc Receipt of weekly holding statement from DP Elimination of problems related to change of address of investor, transmission etc. II. SHAREHOLDERS HOLDING SHARES IN DEMAT FORM (ELECTRONIC): Update your Bank account No., MICR No.,Name and address of the Bank with pincode and Email ID with your DP. Also opt for ECS credit of dividend. Your co-operation in this regard will be highly appreciated. Thanking you, Yours faithfully, for RAIN COMMODITIES LIMITED Sd/S. VENKAT RAMANA REDDY COMPANY SECRETARY
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Rain Commoditiess Ar 2012

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RAIN COMMODITIES LIMITED

CHIEF FINANCIAL OFFICER Mr. T. Srinivasa Rao

COMPANY SECRETARY Mr. S. Venkat Ramana Reddy

38th Annual Report 2012

RAIN COMMODITIES LIMITED

38th Annual Report 2012

RAIN COMMODITIES LIMITED

Sl. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

Page No. 04 10 14 18 28 33 52 55 82 84 85 113 115 117 119

38th Annual Report 2012

RAIN COMMODITIES LIMITED

Co-generation of Energy through Waste-heat Recovery:

Carbon Products Business

Coal Tar Pitch@:

Trading in Petroleum Coke:

38th Annual Report 2012

RAIN COMMODITIES LIMITED

38th Annual Report 2012

RAIN COMMODITIES LIMITED

38th Annual Report 2012

RAIN COMMODITIES LIMITED

38th Annual Report 2012

RAIN COMMODITIES LIMITED Rain Group Operating Facilities

Moundsville West Virginia, USA Lake Charles Louisiana, USA

Robinson Illinois, USA Chalmette Louisiana, USA

Gramercy Louisiana, USA

Norco Louisiana, USA

Purvis Mississippi, USA

Zhenjiang, China Adabeya - Suez, Egypt Nalgonda Andhra Pradesh, India

CPC Coke Trading Cement

Kurnool Andhra Pradesh, India

38th Annual Report 2012

RAIN COMMODITIES LIMITED Ruetgers Operating Facilities

Candiac, Canada Hanau, Germany Kedzierzyn Kozle, Poland Shanghai, China

38th Annual Report 2012

RAIN COMMODITIES LIMITED

KEY FINANCIAL INDICATORS ON A CONSOLIDATED BASIS

Revenue (INR Millions)

56,395 44,615 36,494 37,857

Operating Profit (INR Millions)

12,194 9,120 7,680

38th Annual Report 2012

RAIN COMMODITIES LIMITED

6,641 5,796 4,038 4,020

Adjusted Basic Earnings Per Share (EPS) (INR)

38th Annual Report 2012

RAIN COMMODITIES LIMITED

13,933 12,104 8,398

Book Value Per Share (INR)

60.69 34.18 23.71 39.34

Total Assets (US$ Millions)

1,279 1,166 1,109 1,038

38th Annual Report 2012

RAIN COMMODITIES LIMITED

777 705 647 703

Net Debt in USD (US$ Millions)

610 575 536 413

Net Debt to Net Worth

1.96 X 1.35 X 0.89 X

38th Annual Report 2012

RAIN COMMODITIES LIMITED

38th Annual Report 2012

RAIN COMMODITIES LIMITED NOTES:

38th Annual Report 2012